Target Corporation (TGT)

Cash conversion cycle

		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
Cash conversion cycle	days	-0.76	0.04	-5.92	-9.25	-4.61

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 42.61 + — – 43.37
= -0.76

The cash conversion cycle of Target Corporation has shown variability over the past five years. In the most recent fiscal year ending February 3, 2024, the company had a negative cash conversion cycle of -0.76 days, indicating that it was able to convert its inventory into cash before paying its suppliers and other creditors. This may suggest efficient management of working capital.

In the prior year, ending January 28, 2023, the cash conversion cycle was slightly positive at 0.04 days, implying a minimal delay between the company's cash outflows and inflows related to its operating cycle.

Looking further back, Target Corporation had a significant improvement in its cash conversion cycle in the fiscal year ending January 29, 2022, with a negative cycle of -5.92 days. This suggests that the company was able to efficiently manage its inventory, receivables, and payables during this period.

In the fiscal year ending January 30, 2021, the cash conversion cycle was at its lowest point over the five-year period, with a negative cycle of -9.25 days. This indicates that Target Corporation was effective in quickly converting its resources into cash, showcasing strong cash flow management practices.

Lastly, in the fiscal year ending February 1, 2020, the cash conversion cycle was also negative at -4.61 days, pointing towards effective working capital management by the company during this period.

Overall, Target Corporation has demonstrated varying levels of efficiency in managing its cash conversion cycle over the past five years, with recent years showing improvements or maintaining strong performance in this key financial metric.