Target Corporation (TGT)

Cash conversion cycle

		Feb 1, 2025	Nov 2, 2024	Aug 3, 2024	May 4, 2024	Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020
Days of inventory on hand (DOH)	days	46.01	54.46	45.42	42.37	42.61	52.72	44.80	53.96	73.83	53.13	57.33	56.53	52.23	61.88	46.71	43.93	44.65	61.95	37.08	31.51
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	47.14	51.78	45.39	41.76	43.37	51.14	43.36	51.04	73.77	47.92	55.73	52.67	58.16	67.22	52.40	48.51	53.90	69.21	44.81	35.33
Cash conversion cycle	days	-1.13	2.68	0.03	0.61	-0.76	1.57	1.43	2.91	0.07	5.21	1.61	3.86	-5.92	-5.34	-5.70	-4.58	-9.25	-7.27	-7.73	-3.82

February 1, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 46.01 + — – 47.14
= -1.13

The cash conversion cycle for Target Corporation has exhibited fluctuations over the periods analyzed. The company's cash conversion cycle was negative, indicating efficient management of its working capital, from May 2, 2020, to January 29, 2022, with the cycle ranging between -3.82 days to -9.25 days. This suggests that Target was able to quickly convert its inventory into sales and subsequently into cash during this period.

However, from April 30, 2022, to November 2, 2024, Target's cash conversion cycle turned positive, with the number of days to convert its inventory into cash increasing. The cycle ranged from 0.07 days to 5.21 days during this period. The positive cash conversion cycle may indicate a slowdown in inventory turnover or delays in collecting receivables, affecting the company's cash flow efficiency.

It is noteworthy that the cash conversion cycle returned to a negative figure by February 3, 2024, indicating improvement in the management of working capital. Overall, Target Corporation's cash conversion cycle fluctuated during the periods analyzed, reflecting changes in its operational efficiency and effectiveness in managing its cash flow.