The TJX Companies Inc (TJX)

Payables turnover

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Cost of revenue	US$ in thousands	49,378,000	46,173,000	44,653,000	32,412,700	38,158,800
Payables	US$ in thousands	3,862,000	3,794,000	4,465,000	4,823,400	2,672,560
Payables turnover		12.79	12.17	10.00	6.72	14.28

February 3, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $49,378,000K ÷ $3,862,000K
= 12.79

The payables turnover ratio for The TJX Companies Inc has shown a consistent increasing trend over the past five years, reflecting the company's efficiency in managing its accounts payable. The ratio has improved from 6.72 in 2021 to 12.79 in 2024, indicating that the company is paying its suppliers more frequently within a given period.

The substantial increase in payables turnover from 2021 to 2024 suggests that TJX has been able to negotiate favorable payment terms with its suppliers or has improved its internal processes to settle its payables more efficiently. This improved efficiency may help the company maintain strong relationships with its suppliers by meeting payment obligations promptly.

The payables turnover ratio exceeding 10 for the past three years indicates that TJX is able to convert its accounts payable into cash more than ten times on average during the year. This suggests that the company's working capital management is robust and that it can effectively control its cash flow by efficiently utilizing its accounts payable.

Overall, the increasing trend in payables turnover reflects positively on TJX's financial management practices, demonstrating its ability to effectively manage its payables and optimize its cash flow.