Target Corporation (TGT)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.94 | 0.94 | 0.90 | 0.86 | 0.91 | 0.86 | 0.83 | 0.88 | 0.92 | 0.86 | 0.82 | 0.87 | 0.99 | 0.97 | 1.04 | 1.07 | 1.03 | 1.05 | 1.11 | 1.01 |
| Quick ratio | 0.23 | 0.16 | 0.30 | 0.32 | 0.20 | 0.14 | 0.12 | 0.10 | 0.11 | 0.04 | 0.05 | 0.06 | 0.27 | 0.25 | 0.71 | 0.79 | 0.42 | 0.31 | 0.46 | 0.32 |
| Cash ratio | 0.23 | 0.16 | 0.30 | 0.32 | 0.20 | 0.14 | 0.12 | 0.10 | 0.11 | 0.04 | 0.05 | 0.06 | 0.27 | 0.25 | 0.71 | 0.79 | 0.42 | 0.31 | 0.46 | 0.32 |
Target Corporation's current ratio has been fluctuating over the past few years, ranging from a low of 0.82 to a high of 1.11. This indicates the company's ability to cover short-term obligations with its current assets, with the ratio typically hovering around 1. A current ratio below 1 suggests potential liquidity issues.
The quick ratio, which excludes inventory from current assets, shows a similar trend, varying from 0.04 to 0.79. This ratio provides a more conservative measure of liquidity, and a value above 1 is generally considered favorable.
The cash ratio, reflecting the most liquid assets, also showcases fluctuations between 0.04 and 0.79. This ratio indicates the company's ability to cover current liabilities using only cash and cash equivalents, with higher values indicating stronger liquidity.
Overall, while the current ratio has sometimes dipped below 1, the quick and cash ratios suggest a more stable liquidity position for Target Corporation. However, ongoing monitoring of these ratios is essential to ensure the company can meet its short-term obligations effectively.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle (CCC) measures the time it takes for a company like Target Corporation to convert its investments in inventory and other resources into cash from sales. A shorter CCC indicates that the company is managing its working capital efficiently.
From May 2, 2020, to January 29, 2022, Target had a negative CCC, meaning it was able to convert its investments into cash quickly. The average CCC during this period was around -5.60 days. This negative CCC suggests that Target was efficient in managing its inventory, collecting receivables, and paying its payables, allowing it to cycle cash quickly.
However, starting from April 30, 2022, the CCC turned positive, indicating that Target took longer to convert its investments into cash. The CCC fluctuated between 0 and 5.21 days until November 2, 2024, suggesting some variability in Target's working capital management during this period.
Overall, Target Corporation's cash conversion cycle improved significantly from 2020 to early 2022 but faced some challenges afterward. Continuous monitoring and management of the CCC are essential for ensuring efficient working capital management and cash flow generation.