RH (RH)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| Quick ratio | 0.03 | 0.10 | 0.08 | 0.11 | 0.23 | 0.14 | 0.41 | 0.50 | 0.48 | 0.56 | 1.79 | 1.88 | 1.70 | 1.79 | 2.49 | 2.18 | 2.39 | 1.65 | 2.05 | 2.11 |
| Cash ratio | 0.03 | 0.10 | 0.08 | 0.11 | 0.14 | 0.14 | 0.41 | 0.41 | 0.48 | 0.48 | 1.79 | 1.78 | 1.70 | 1.70 | 2.30 | 2.18 | 2.17 | 1.65 | 2.05 | 2.05 |
The liquidity ratios of RH indicate the company's ability to meet its short-term obligations and cover immediate financial needs.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has shown some variability over the reporting periods, ranging from a high of 3.49 to a low of 1.23. A current ratio above 1.0 signifies that RH has more current assets than current liabilities, providing a cushion for its short-term obligations.
The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. This ratio has generally been lower than the current ratio, ranging from 2.49 to 0.03. A quick ratio above 1.0 indicates that RH can cover its short-term liabilities without relying on selling inventory.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has also shown a declining trend over the periods, ranging from 2.30 to 0.03. Despite the fluctuations in the cash ratio, having a ratio above 1.0 implies that RH has sufficient cash to cover its current liabilities.
Overall, RH's liquidity ratios suggest that while the company has maintained a healthy level of liquidity in the past, there has been a recent downward trend in the ratios, indicating a potential need for closer monitoring of its liquidity position and management of short-term obligations.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 210.75 | 176.28 | 168.00 | 153.86 | 93.03 | 143.97 | 117.11 | 99.40 | 124.36 | 109.01 | 129.33 | 97.56 | 126.83 | 88.59 | 112.18 | 147.47 | 122.94 | 140.78 | 110.80 | 75.41 |
The cash conversion cycle is a key metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash from sales.
Based on the provided data for RH, the cash conversion cycle varied over time. Here is a detailed analysis of the trend:
- The cash conversion cycle for RH fluctuated over the periods reported, ranging from a low of 75.41 days to a high of 210.75 days.
- The company's cash conversion cycle showed an increasing trend over the years, indicating a potential inefficiency in managing working capital.
- During some periods, such as April 30, 2022, July 31, 2024, and October 31, 2024, the cash conversion cycle exceeded 150 days, suggesting longer periods of tying up cash in the operational cycle.
- On the other hand, there were instances where the cash conversion cycle decreased, such as February 3, 2024, which could indicate improvements in inventory turnover or collection periods.
Overall, the trend in the cash conversion cycle for RH indicates the need for closer monitoring and potential strategies to streamline operations, manage inventory levels more efficiently, and accelerate the collection of receivables to improve cash flow and liquidity.