Signet Jewelers Ltd (SIG)
Working capital turnover
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,202,700 | 7,830,100 | 7,807,100 | 5,166,000 | 6,113,300 |
| Total current assets | US$ in thousands | 3,536,600 | 3,507,100 | 3,730,400 | 3,582,000 | 3,154,800 |
| Total current liabilities | US$ in thousands | 1,976,000 | 2,248,100 | 2,070,700 | 1,998,700 | 1,652,600 |
| Working capital turnover | 4.62 | 6.22 | 4.70 | 3.26 | 4.07 |
February 3, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,202,700K ÷ ($3,536,600K – $1,976,000K)
= 4.62
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. In the case of Signet Jewelers Ltd, the working capital turnover has fluctuated over the past five years.
In the most recent fiscal year, ending on Feb 3, 2024, Signet Jewelers had a working capital turnover ratio of 4.62, indicating that the company generated $4.62 in sales for every $1 of working capital invested. This represents a decrease from the previous year's ratio of 6.22.
The decrease in the working capital turnover ratio from the prior year may suggest that Signet Jewelers is becoming less efficient in utilizing its working capital to generate sales. However, it is essential to consider other factors such as changes in the company's operating cycle or sales volume that may have influenced this ratio.
Looking at the trend over the past five years, there have been fluctuations in the working capital turnover ratio for Signet Jewelers, with the ratio ranging from 3.26 to 6.22. This variability may indicate changes in the company's operational efficiency and management of working capital during this period.
Overall, a thorough analysis of the working capital turnover ratio for Signet Jewelers suggests the need for further investigation into the company's working capital management practices and operational performance to understand the drivers behind the fluctuations in this ratio.