RH (RH)
Current ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 1.43 | 1.43 | 1.21 | 1.16 | 1.26 | 1.23 | 1.38 | 1.38 | 1.55 | 1.55 | 2.91 | 2.91 | 2.84 | 2.84 | 3.49 | 3.38 | 3.39 | 2.50 | 2.91 | 2.91 |
January 31, 2025 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,291,330K ÷ $905,126K
= 1.43
The current ratio of RH has fluctuated over the past few years, ranging from a high of 3.49 to a low of 1.16. The current ratio measures a company's ability to cover its short-term liabilities with its current assets. A ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered favorable.
RH's current ratio exceeded 1 consistently until the second quarter of fiscal year 2023, where it dropped significantly to 1.55. This may indicate potential liquidity issues or difficulties in meeting short-term obligations. The ratio further decreased in subsequent quarters, hitting a low of 1.16 by April 30, 2024.
While RH's current ratio improved slightly in the following quarters, reaching 1.43 by January 31, 2025, it still remains below the ideal ratio of 2 or higher. Investors and creditors typically look for a current ratio of at least 1.5 to ensure a company can meet its short-term obligations. RH's declining current ratio trend suggests a need for improved liquidity management and efficient utilization of current assets to strengthen its financial position.