Signet Jewelers Ltd (SIG)
Working capital turnover
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,712,300 | 7,202,700 | 7,830,100 | 7,807,100 | 5,166,000 |
| Total current assets | US$ in thousands | 2,712,200 | 3,536,600 | 3,507,100 | 3,730,400 | 3,582,000 |
| Total current liabilities | US$ in thousands | 1,831,500 | 1,976,000 | 2,248,100 | 2,070,700 | 1,998,700 |
| Working capital turnover | 7.62 | 4.62 | 6.22 | 4.70 | 3.26 |
February 1, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,712,300K ÷ ($2,712,200K – $1,831,500K)
= 7.62
Signet Jewelers Ltd's working capital turnover ratio has shown a positive trend over the past five years. In January 2021, the ratio stood at 3.26, indicating that the company generated $3.26 of revenue for every dollar of working capital invested. By January 2025, this ratio had increased to 7.62, demonstrating a significant improvement in efficiency.
This upward trend suggests that Signet Jewelers Ltd has been managing its working capital more effectively, potentially by optimizing inventory levels, managing accounts receivable and accounts payable efficiently, or improving its overall operational efficiency. A higher working capital turnover ratio indicates that the company is generating more sales revenue relative to its investment in working capital, which can be a positive sign of operational efficiency and financial health.
However, it's essential to note that a very high turnover ratio could also indicate aggressive financial management, potential risks of stockouts, or a need for further analysis to understand the underlying factors driving this increase. Overall, Signet Jewelers Ltd's improving working capital turnover ratio reflects positively on the company's operational efficiency and management of its working capital over the past five years.