RH (RH)
Working capital turnover
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,180,750 | 2,836,370 | 3,029,130 | 3,590,480 | 3,539,340 |
| Total current assets | US$ in thousands | 1,291,330 | 1,101,900 | 1,101,900 | 2,512,660 | 2,512,660 |
| Total current liabilities | US$ in thousands | 905,126 | 872,868 | 872,868 | 885,973 | 885,973 |
| Working capital turnover | 8.24 | 12.38 | 13.23 | 2.21 | 2.18 |
January 31, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,180,750K ÷ ($1,291,330K – $905,126K)
= 8.24
To analyze RH's working capital turnover, we calculate the ratio by dividing sales by average working capital. The trend indicates an improvement in the efficiency of RH's working capital management. The working capital turnover ratio increased significantly from 2.18 in January 28, 2023, to 8.24 in January 31, 2025.
This suggests that RH is generating more sales revenue for each dollar invested in working capital, indicating an enhanced ability to convert working capital into sales. The notable increase in the ratio over the years reflects a more efficient utilization of working capital, which can lead to improved liquidity and operational performance.