The TJX Companies Inc (TJX)

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	44.09	63.16	51.17	50.83	46.00	66.76	56.37	55.62	48.73	57.46	46.35	51.85	48.84	54.92	40.80	50.78	46.61	61.58	50.67	50.96
Days of sales outstanding (DSO)	days	3.97	4.84	4.95	4.58	4.97	5.29	4.92	4.64	4.78	5.68	6.31	6.67	5.70	7.10	8.11	6.48	3.79	5.62	5.07	3.98
Number of days of payables	days	28.55	41.35	34.49	33.97	29.99	40.02	32.51	34.78	36.50	47.15	40.22	44.94	54.32	67.50	26.40	11.00	25.56	33.83	25.97	25.98
Cash conversion cycle	days	19.51	26.65	21.63	21.45	20.98	32.03	28.78	25.48	17.02	15.99	12.44	13.58	0.23	-5.49	22.52	46.26	24.83	33.36	29.77	28.96

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 fluctuated over the past few quarters. In the most recent period ending February 3, 2024, the company's cash conversion cycle was 19.51 days, indicating that it takes approximately 19.51 days for the company to convert its investments in inventory and other resources into cash from sales.

Historically, the company's cash conversion cycle has shown variability, with a peak of 46.26 days on February 1, 2020, and a low of -5.49 days on October 31, 2020, where the negative value suggests that the company was able to convert its resources into cash more quickly.

A lower cash conversion cycle is generally considered positive as it signifies a more efficient use of resources and quicker conversion of inventory into sales and cash. Conversely, a longer cash conversion cycle can indicate inefficiencies in inventory management or difficulties in collecting receivables.

Overall, monitoring and analyzing the cash conversion cycle can provide insights into the company's operational efficiency, management of working capital, and effectiveness in generating cash flow from its core business activities.