Williams-Sonoma Inc (WSM)
Liquidity ratios
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.45 | 1.31 | 1.22 | 1.12 | 1.24 | 1.11 | 1.06 | 1.11 | 1.31 | 1.29 | 1.31 | 1.28 | 1.34 | 1.46 | 1.36 | 1.28 | 1.09 | 1.29 | 1.31 | 1.33 |
| Quick ratio | 0.74 | 0.46 | 0.38 | 0.24 | 0.30 | 0.13 | 0.14 | 0.26 | 0.55 | 0.47 | 0.50 | 0.51 | 0.73 | 0.62 | 0.65 | 0.57 | 0.34 | 0.21 | 0.20 | 0.19 |
| Cash ratio | 0.67 | 0.39 | 0.31 | 0.17 | 0.22 | 0.06 | 0.07 | 0.19 | 0.48 | 0.39 | 0.41 | 0.42 | 0.65 | 0.53 | 0.57 | 0.51 | 0.27 | 0.12 | 0.10 | 0.10 |
Williams-Sonoma Inc's liquidity ratios have shown some fluctuations over the past several quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating a healthy liquidity position. However, there has been some variability in this ratio, with a high of 1.45 and a low of 1.06 in the most recent quarters.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has been more volatile compared to the current ratio. The company's ability to meet its short-term obligations with its most liquid assets has varied widely, with a low of 0.13 and a high of 0.74.
The cash ratio, which is the most conservative liquidity ratio that only considers cash and cash equivalents, has also shown fluctuations over the periods under review. Williams-Sonoma Inc's ability to cover its current liabilities with cash on hand has ranged from a low of 0.06 to a high of 0.67.
Overall, while the company's current ratio generally reflects a strong liquidity position, the more conservative quick and cash ratios suggest that there may be some variability in its ability to meet short-term obligations using only its most liquid assets. This implies that Williams-Sonoma Inc may need to carefully manage its cash flow and liquidity position to ensure stability in the face of changing business conditions.
See also:
Additional liquidity measure
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 118.41 | 136.40 | 128.88 | 135.21 | 163.42 | 162.48 | 146.23 | 130.01 | 112.01 | 114.34 | 110.09 | 108.95 | 104.85 | 130.78 | 155.65 | 146.77 | 133.28 | 182.35 | 177.43 | 174.81 |
The cash conversion cycle of Williams-Sonoma Inc, as reflected in the provided data, has shown fluctuations over the analyzed periods. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales.
From the data, we can observe that the company's cash conversion cycle has varied between 104.85 days and 182.35 days over the past several periods. This indicates that Williams-Sonoma Inc has experienced fluctuations in the efficiency with which it is managing its working capital components, namely inventory, accounts receivable, and accounts payable.
A shorter cash conversion cycle generally implies that a company is more efficient in managing its working capital and converting its investments into cash. Conversely, a longer cycle may indicate inefficiencies in the company's working capital management practices, potentially leading to cash flow challenges and increased financial risk.
It is important for Williams-Sonoma Inc to closely monitor its cash conversion cycle and take measures to optimize its working capital management. By streamlining inventory levels, improving accounts receivable collection processes, and negotiating favorable payment terms with suppliers, the company may be able to shorten its cash conversion cycle, improve cash flow, and enhance overall financial performance.