Target Corporation (TGT)

Payables turnover

		Feb 1, 2025	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021
Cost of revenue	US$ in thousands	101,068,000	101,807,000	105,338,000	97,146,000	87,084,000
Payables	US$ in thousands	13,053,000	12,098,000	13,487,000	15,478,000	12,859,000
Payables turnover		7.74	8.42	7.81	6.28	6.77

February 1, 2025 calculation

Payables turnover = Cost of revenue ÷ Payables
= $101,068,000K ÷ $13,053,000K
= 7.74

The payables turnover ratio measures how efficiently a company manages its accounts payable by evaluating how many times a company pays off its suppliers in a given time period. Looking at the data provided for Target Corporation:

- In January 30, 2021, the payables turnover ratio was 6.77, indicating that, on average, Target paid off its suppliers approximately 6.77 times during that year.
- By January 29, 2022, the ratio declined to 6.28, suggesting that Target took slightly longer to pay its suppliers compared to the previous year.
- However, there was a significant improvement by January 28, 2023, with a payables turnover ratio of 7.81, signaling that the company was more efficient in settling its accounts payable.
- This trend continued to February 3, 2024, where the ratio increased to 8.42, indicating an even higher level of efficiency in managing payables.
- By February 1, 2025, the ratio decreased slightly to 7.74, but still remained at a relatively high level compared to previous years.

Overall, Target Corporation has shown improvements in managing its accounts payable over the years, with the ratio consistently above 6 and even reaching levels above 8, reflecting efficient creditor payment policies. This trend suggests that Target has been effective in balancing its cash flow management while maintaining positive relationships with its suppliers.