The TJX Companies Inc (TJX)

Cash conversion cycle

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Days of inventory on hand (DOH)	days	44.09	46.00	48.73	48.84	46.61
Days of sales outstanding (DSO)	days	3.97	4.97	4.78	5.75	3.79
Number of days of payables	days	28.55	29.99	36.50	54.32	25.56
Cash conversion cycle	days	19.51	20.98	17.02	0.28	24.84

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.09 + 3.97 – 28.55
= 19.51

The cash conversion cycle of The TJX Companies Inc has shown fluctuations over the past five years. In the most recent fiscal year ending on February 3, 2024, the company's cash conversion cycle was 19.51 days, indicating an improvement compared to the previous year. This suggests that the company was able to manage its working capital more efficiently.

Looking back further, in January 2023 and January 2022, the cash conversion cycles were 20.98 days and 17.02 days, respectively. This demonstrates a slight increase in the cash conversion cycle in 2023 compared to 2022. However, the company managed to lower the cycle back in 2022, indicating effective management of cash flow and working capital.

In January 2021, there was a significant improvement in the cash conversion cycle, with the cycle being only 0.28 days. This suggests that the company was able to convert its inventory and receivables into cash quickly, reflecting efficient operations in managing working capital.

Contrastingly, in February 2020, the company's cash conversion cycle was 24.84 days, indicating that it took longer to convert inventory and receivables into cash compared to the other years analyzed.

Overall, fluctuations in the cash conversion cycle indicate that The TJX Companies Inc has experienced variability in its working capital management over the past five years. Further analysis may be needed to understand the factors contributing to these fluctuations and to assess the effectiveness of the company's working capital management strategies.