RH (RH)
Liquidity ratios
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.26 | 1.38 | 1.55 | 2.91 | 2.84 | 3.49 | 3.39 | 2.50 | 2.91 | 2.75 | 0.93 | 0.97 | 0.87 | 0.83 | 0.79 | 0.65 | 0.61 | 0.62 | 0.71 | 0.81 |
| Quick ratio | 0.23 | 0.50 | 0.56 | 1.88 | 1.79 | 2.49 | 2.39 | 1.80 | 2.11 | 2.08 | 0.31 | 0.23 | 0.19 | 0.19 | 0.02 | 0.02 | 0.10 | 0.04 | 0.01 | 0.04 |
| Cash ratio | 0.14 | 0.41 | 0.48 | 1.78 | 1.70 | 2.30 | 2.17 | 1.65 | 2.05 | 2.01 | 0.24 | 0.23 | 0.11 | 0.10 | 0.02 | 0.02 | 0.05 | 0.04 | 0.01 | 0.04 |
Based on the data provided, the liquidity ratios of RH have displayed notable fluctuations over the past several reporting periods.
The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, has ranged from a low of 0.61 to a high of 3.49. It appears that the current ratio has generally been above 1, indicating that RH has had sufficient current assets to cover its current liabilities. However, there have been instances, such as in the periods ending July 31, 2021, and February 1, 2020, where the current ratio fell below 1, signaling potential liquidity concerns.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited significant variability, ranging from 0.01 to 2.49. Similar to the current ratio, the quick ratio has generally been above 1, suggesting RH's ability to meet its short-term obligations without relying on selling inventory. However, there were instances, such as in the periods ending August 1, 2020, and May 4, 2019, where the quick ratio was extremely low, indicating potential short-term liquidity challenges.
The cash ratio, which provides the most conservative measure of liquidity by focusing solely on cash and cash equivalents, has shown fluctuations between 0.01 and 2.30. RH's ability to cover its current liabilities solely with cash on hand has varied over time, with some periods indicating stronger liquidity positions than others.
Overall, these liquidity ratios suggest that while RH has generally maintained adequate liquidity to meet its short-term obligations, there have been periods of weaker liquidity positions that may warrant further investigation and monitoring by stakeholders.
See also:
Additional liquidity measure
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 77.54 | 81.23 | 85.24 | 85.37 | 80.44 | 95.63 | 101.96 | 89.62 | 64.81 | 62.04 | 61.12 | -31.16 | 52.63 | 57.36 | -29.08 | -23.85 | 56.89 | -26.84 | -28.07 | -34.68 |
The cash conversion cycle of RH, a measure of how long it takes for a company to convert its investments in inventory back to cash, has exhibited fluctuating trends over the past few reporting periods.
From Aug 1, 2020, to Apr 30, 2022, the company's cash conversion cycle ranged between -34.68 days (indicating a rapid cash conversion efficiency) to 101.96 days, suggesting varying efficiency in managing its working capital during this period.
The most recent data as of Feb 3, 2024, shows a cash conversion cycle of 77.54 days, indicating that RH takes approximately 77.54 days to convert its resource investments, such as inventory, back into cash. This reflects a slight improvement compared to the prior quarter's 81.23 days.
It is noteworthy that the cash conversion cycle was negative in some periods, such as Jan 31, 2021, and May 1, 2021. A negative cash conversion cycle implies that the company is able to convert its investments back into cash before having to pay its suppliers, a favorable indicator of liquidity and operational efficiency.
RH should continue to monitor and manage its cash conversion cycle efficiently to optimize working capital utilization and ensure healthy cash flows in the future.