Target Corporation (TGT)

Cash conversion cycle

		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	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Days of inventory on hand (DOH)	days	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	29.50	56.89	45.95	45.93
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	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	32.54	56.20	46.11	42.38
Cash conversion cycle	days	-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	-3.04	0.69	-0.15	3.55

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 fluctuated over the past few periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory back into cash.

Between Nov 2, 2019, and Feb 3, 2024, the cash conversion cycle ranged from -9.25 days to 5.21 days. A negative cash conversion cycle indicates efficient management of working capital, while a positive cycle suggests potential delays in converting inventory to cash.

Target Corporation experienced a negative cash conversion cycle for several periods, indicating effective inventory management and quick conversion of goods into cash. However, there were also periods with positive cash conversion cycles, suggesting potential inefficiencies in managing working capital.

Overall, Target Corporation should strive to maintain a stable and efficient cash conversion cycle to optimize its working capital management and cash flow.