RH (RH)
Current ratio
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 1.43 | 1.26 | 1.26 | 2.84 | 2.84 |
January 31, 2025 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,291,330K ÷ $905,126K
= 1.43
The current ratio, which measures a company's ability to meet its short-term obligations with its current assets, for RH has shown some fluctuations over the past few years. As of January 28, 2023, and January 31, 2023, the current ratio stood at a healthy 2.84, indicating a strong liquidity position. However, by January 31, 2024, and February 3, 2024, the current ratio decreased significantly to 1.26, suggesting a potential strain on RH's ability to cover its current liabilities with existing current assets. Subsequently, by January 31, 2025, the current ratio improved slightly to 1.43, but it still remains below the ideal ratio of 2.
Overall, the trend in RH's current ratio indicates some inconsistency in the management of short-term liquidity, which may warrant further investigation to understand the underlying reasons for these fluctuations and to implement strategies to improve the company's liquidity position.