Target Corporation (TGT)
Activity ratios
Short-term
Turnover ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.57 | 7.80 | 6.99 | 8.17 | 8.17 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 8.42 | 7.81 | 6.28 | 6.77 | 7.41 |
| Working capital turnover | — | — | — | 145.94 | — |
Inventory turnover for Target Corporation has been consistently high over the years, with a gradual increase from 6.99 in 2022 to 8.57 in 2024. This indicates that Target is efficiently managing its inventory by quickly selling and replacing stock.
Payables turnover has shown some fluctuations but generally remained above 6 in the past five years, reflecting that Target is effectively managing its trade payables. The slight increase in payables turnover from 2020 to 2024 signifies that Target is taking longer to pay its suppliers.
The lack of data for receivables turnover and working capital turnover limits a comprehensive analysis of Target's efficiency in collecting receivables and utilizing working capital. Without this data, it is challenging to fully evaluate Target's performance in these areas.
In conclusion, Target Corporation's inventory turnover and payables turnover ratios indicate strong operational efficiency in managing inventory and trade payables. To gain a more complete picture of its overall efficiency, further information on receivables turnover and working capital turnover would be necessary.
Average number of days
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 42.61 | 46.77 | 52.23 | 44.65 | 44.67 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 43.37 | 46.73 | 58.15 | 53.90 | 49.28 |
Days of Inventory on Hand (DOH) shows how many days, on average, a company holds its inventory before selling it. Target Corporation's DOH has improved from 46.77 days in 2023 to 42.61 days in 2024, indicating that the company is managing its inventory more efficiently.
Days of Sales Outstanding (DSO) measures how long it takes for a company to collect payment after making a sale. Unfortunately, the data is missing for Target Corporation, so we cannot analyze this metric for the company.
Number of Days of Payables represents the average number of days it takes for a company to pay its suppliers. Target Corporation has decreased its number of days of payables from 46.73 days in 2023 to 43.37 days in 2024. This indicates that the company is paying its suppliers more quickly, which can be beneficial in terms of maintaining relationships and potentially capturing early payment discounts.
See also:
Target Corporation Short-term (Operating) Activity Ratios
Long-term
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.38 | 3.45 | 3.76 | 3.43 | 2.95 |
| Total asset turnover | 1.93 | 2.04 | 1.97 | 1.80 | 1.81 |
Based on the provided data, we can analyze the long-term activity ratios of Target Corporation consistently over the past five fiscal years.
1. Fixed Asset Turnover:
- Fixed asset turnover measures how efficiently a company generates sales from its fixed assets. Target Corporation's fixed asset turnover has been fluctuating over the last five years, ranging from 2.95 to 3.76.
- In general, a higher fixed asset turnover indicates that the company is effectively utilizing its fixed assets to generate sales. The trend in Target's fixed asset turnover suggests that the company has been relatively efficient in utilizing its fixed assets to generate sales, with a peak in fiscal year 2022.
- However, the slight decrease in the fixed asset turnover from fiscal year 2022 to fiscal year 2023 may indicate a slight decrease in the efficiency of utilizing fixed assets to generate sales. Further analysis would be needed to understand the reasons behind this change.
2. Total Asset Turnover:
- Total asset turnover reflects how well a company utilizes all its assets to generate sales. Target Corporation's total asset turnover has ranged from 1.80 to 2.04 over the past five years.
- A higher total asset turnover ratio indicates that the company is effectively utilizing its total assets to generate sales. The trend in Target's total asset turnover shows some variability but generally remains within a relatively stable range.
- The overall trend suggests that Target has been able to efficiently generate sales relative to its total asset base over the past five years, with some fluctuations in performance.
In conclusion, based on the long-term activity ratios, Target Corporation has shown reasonable efficiency in utilizing both its fixed assets and total assets to generate sales. Monitoring these ratios over time can provide insights into the company's operational efficiency and asset utilization strategies.