The TJX Companies Inc (TJX)
Liquidity ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.21 | 1.21 | 1.27 | 1.46 | 1.24 |
| Quick ratio | 0.59 | 0.60 | 0.66 | 1.02 | 0.51 |
| Cash ratio | 0.54 | 0.53 | 0.59 | 0.97 | 0.45 |
The liquidity ratios of The TJX Companies Inc show fluctuations over the past five years.
1. Current Ratio: The company's current ratio has decreased from 1.46 in January 2021 to 1.21 in February 2024. This ratio indicates a moderate decline in the company's ability to meet its short-term obligations with its current assets.
2. Quick Ratio: The quick ratio has also shown a downward trend, dropping from 1.02 in January 2021 to 0.59 in February 2024. This suggests a decrease in the company's ability to cover its immediate liabilities without relying on inventory.
3. Cash Ratio: The cash ratio has followed a similar pattern, decreasing from 0.97 in January 2021 to 0.54 in February 2024. This indicates a reduction in the company's ability to pay off its current liabilities solely with its cash and cash equivalents.
Overall, the declining trend in liquidity ratios suggests that The TJX Companies Inc may be experiencing challenges in maintaining sufficient liquidity to meet its short-term financial obligations. Further analysis of the company's cash management practices and working capital efficiency may be warranted to address these liquidity concerns.
See also:
Additional liquidity measure
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 19.51 | 20.98 | 17.02 | 0.28 | 24.84 |
The cash conversion cycle of The TJX Companies Inc has shown fluctuating trends over the past five years. In fiscal year 2024, the company's cash conversion cycle improved to 19.51 days from 20.98 days in the previous year. This indicates that TJX was able to convert its inventory into cash more efficiently in the most recent fiscal year. In comparison to fiscal year 2022 when the cycle was 17.02 days, the company took slightly longer to convert its inventory into cash in fiscal year 2024.
However, there were significant variations in the cash conversion cycle in the earlier years. In fiscal year 2021, TJX had a very low cash conversion cycle of 0.28 days, suggesting that the company was able to quickly convert inventory into cash. This was followed by a substantial increase to 24.84 days in fiscal year 2020, indicating a significant delay in converting inventory into cash.
Overall, the fluctuating trends in TJX's cash conversion cycle over the past five years suggest variability in the company's effectiveness in managing its inventory, accounts receivable, and accounts payable. It would be important for investors and stakeholders to monitor this metric closely to assess the company's efficiency in managing working capital and generating cash flow.