RH (RH)
Working capital turnover
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | Jan 29, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 3,180,753 | 3,048,367 | 2,974,895 | 2,896,465 | 2,867,490 | 2,987,949 | 3,007,166 | 2,995,103 | 2,998,010 | 2,970,030 | 3,176,231 | 3,276,578 | 3,567,306 | 3,737,786 | 3,731,400 | 3,794,632 | 3,674,241 | 3,737,692 | 3,756,281 | 3,842,399 |
| Total current assets | US$ in thousands | 1,291,330 | 1,277,750 | 1,219,280 | 1,082,680 | 1,101,900 | 1,074,050 | 1,286,880 | 1,286,880 | 1,356,530 | 1,356,530 | 2,475,840 | 2,475,840 | 2,512,660 | 2,512,660 | 3,266,460 | 3,237,470 | 3,251,320 | 3,399,060 | 3,091,440 | 3,091,440 |
| Total current liabilities | US$ in thousands | 905,126 | 896,267 | 1,010,550 | 936,491 | 872,868 | 872,868 | 934,974 | 934,974 | 872,666 | 872,666 | 851,503 | 851,503 | 885,973 | 885,973 | 935,176 | 958,903 | 958,903 | 1,361,530 | 1,063,760 | 1,063,760 |
| Working capital turnover | 8.24 | 7.99 | 14.25 | 19.81 | 12.52 | 14.85 | 8.55 | 8.51 | 6.20 | 6.14 | 1.96 | 2.02 | 2.19 | 2.30 | 1.60 | 1.67 | 1.60 | 1.83 | 1.85 | 1.89 |
January 31, 2025 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,180,753K ÷ ($1,291,330K – $905,126K)
= 8.24
The working capital turnover for RH has seen fluctuations over the provided time period, ranging from a low of 1.60 to a high of 19.81. This ratio indicates how efficiently the company is using its working capital to generate revenue.
The trend shows that in the earlier periods, the working capital turnover was relatively stable around 1.80-2.30, indicating a moderate efficiency in converting working capital into sales. However, starting from the second half of 2023, there is a significant increase in the ratio, reaching as high as 19.81 in April 30, 2024, suggesting a substantial improvement in working capital efficiency.
The sudden spike and subsequent decline in the ratio may be due to various factors such as changes in inventory management, receivables collection, or overall operational efficiency. It would be important for RH to analyze this trend further and ensure that the working capital turnover remains at an optimal level to support sustainable business operations.