Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Cash Flow Statement
- Analysis of Long-term (Investment) Activity Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Short-term Activity Ratios (Summary)
Williams-Sonoma Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
- Inventory Turnover
- The inventory turnover ratio increased from 3.17 in 2019 to a peak of 4.12 in 2021, indicating improved efficiency in managing inventory. However, it subsequently declined to 3.43 in 2023 before slightly recovering to 3.57 in 2024, suggesting some fluctuation in inventory management effectiveness over the examined period.
- Receivables Turnover
- Receivables turnover showed variability, starting at 52.96 in 2019, slightly decreasing to 47.19 in 2021, then spiking to 74.98 in 2023, before dropping to 63.06 in 2024. This indicates periods of accelerated collection efficiency, especially notable in 2023, followed by a moderate reduction in turnover.
- Payables Turnover
- The payables turnover ratio steadily increased from 6.78 in 2019 to a peak of 9.83 in 2023, reflecting quicker payments to suppliers. In 2024, it declined to 7.32, indicating a slight deceleration in payment speed compared to the previous year.
- Working Capital Turnover
- Working capital turnover experienced significant fluctuations, from 9.15 in 2019 to an exceptionally high value of 40.38 in 2020, followed by a sharp decrease to 10.96 in 2021. It rose again to 21.71 in 2023 before dropping substantially to 9.23 in 2024. These variations may indicate changes in the company's operational efficiency or working capital management strategies during this period.
- Average Inventory Processing Period
- The average inventory processing period decreased from 115 days in 2019 to 89 days in 2021, suggesting faster inventory turnover. However, it increased again to 99 days in 2022 and fluctuated around 102-106 days in subsequent years, indicating some instability in inventory processing times.
- Average Receivable Collection Period
- The average receivable collection period remained low and relatively stable, ranging from 7 days in 2019 to a low of 5 days in 2023, and slightly rising to 6 days in 2024. This indicates consistently efficient collection of receivables throughout the period.
- Operating Cycle
- The operating cycle shortened from 122 days in 2019 to a low of 97 days in 2021, reflecting overall improvements in inventory and receivables management. It lengthened to 111 days in 2023 before slightly decreasing to 108 days in 2024, implying a moderate decline in overall operational efficiency.
- Average Payables Payment Period
- The average payables payment period decreased steadily from 54 days in 2019 to a low of 37 days in 2023, indicating quicker payments to suppliers. However, it increased again to 50 days in 2024, suggesting a trend towards slower payments at the end of the period.
- Cash Conversion Cycle
- The cash conversion cycle improved from 68 days in 2019 to 49 days in 2021, demonstrating enhanced liquidity and operational efficiency. It then worsened to 74 days in 2023 before improving again to 58 days in 2024. These fluctuations highlight variable effectiveness in cash flow management across the years.
Turnover Ratios
Average No. Days
Inventory Turnover
Williams-Sonoma Inc., inventory turnover calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cost of goods sold | |||||||
| Merchandise inventories, net | |||||||
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | |||||||
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Inventory Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Inventory Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Inventory turnover = Cost of goods sold ÷ Merchandise inventories, net
= ÷ =
2 Click competitor name to see calculations.
- Cost of Goods Sold
- The cost of goods sold displays an overall upward trend from 2019 to 2023, increasing from approximately 3.57 billion USD in 2019 to nearly 5.0 billion USD in 2023. However, in the most recent period ending January 28, 2024, there is a noticeable decline to around 4.45 billion USD. This decline interrupts the previous consistent year-over-year growth pattern, suggesting a potential reduction in sales volume, cost control measures, or inventory adjustments.
- Merchandise Inventories, Net
- Merchandise inventories decreased slightly from about 1.12 billion USD in 2019 to approximately 1.01 billion USD in 2021, indicating a possible strategic reduction or optimization in inventory levels during this period. Subsequently, inventories rose substantially to a peak of around 1.46 billion USD in 2023, showing significant stock buildup. In 2024, the inventory figure declines again to roughly 1.25 billion USD, which may point to improved inventory management or reduced procurement aligned with the lower cost of goods sold.
- Inventory Turnover Ratio
- The inventory turnover ratio improved steadily from 3.17 in 2019 to a peak of 4.12 in 2021, reflecting increasing efficiency in inventory management and possibly stronger sales relative to inventory held. After 2021, the ratio declined to 3.7 in 2022 and further decreased to 3.43 in 2023. In 2024, a slight recovery to 3.57 is observed, suggesting some improvement in how quickly inventory is sold or used. Overall, the inventory turnover reflects variability corresponding with changes in both inventory levels and cost of goods sold.
- Summary of Trends and Insights
- The data reveals a generally increasing cost of goods sold and inventory levels until 2023, followed by declines in 2024, implying a possible adjustment phase. The inventory turnover ratio's peak in 2021 indicates a period of heightened operational efficiency, with subsequent decreases hinting at potential challenges in maintaining that efficiency. The recent upturn in turnover ratio in 2024, alongside a reduction in both inventory and cost of goods sold, suggests efforts to recalibrate inventory management and optimize operational expenses.
Receivables Turnover
Williams-Sonoma Inc., receivables turnover calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net revenues | |||||||
| Accounts receivable, net | |||||||
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | |||||||
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Receivables Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Receivables Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Receivables turnover = Net revenues ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues demonstrated an overall upward trend from fiscal year 2019 through fiscal year 2023, increasing from approximately 5.67 billion USD in 2019 to a peak of around 8.67 billion USD in 2023. However, there was a notable decline in the most recent year ending January 28, 2024, where revenues fell to approximately 7.75 billion USD. This represents a decrease from the prior year, suggesting potential challenges or market shifts affecting sales performance.
- Accounts Receivable, Net
- The net accounts receivable balance exhibited moderate fluctuation over the observed periods. Starting at about 107.1 million USD in 2019, receivables increased steadily to a high of approximately 143.7 million USD in 2021. Subsequently, the balance declined in the following years to 115.7 million USD in 2023 before a slight increase to 122.9 million USD in 2024. This pattern indicates some variability in collections or credit extension practices.
- Receivables Turnover
- The receivables turnover ratio showed considerable variability. It was relatively stable around 52.9 in 2019 and 52.8 in 2020 but declined to 47.2 in 2021, indicating slower collections relative to accounts receivable during that period. Subsequently, turnover improved sharply, reaching highs of 62.6 in 2022 and 75.0 in 2023, suggesting enhanced efficiency in receivables management. However, the ratio declined again to 63.1 in 2024, which may reflect a slight easing in collection speed or changes in credit policy during the most recent year.
Payables Turnover
Williams-Sonoma Inc., payables turnover calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cost of goods sold | |||||||
| Accounts payable | |||||||
| Short-term Activity Ratio | |||||||
| Payables turnover1 | |||||||
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Payables Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Payables Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Payables turnover = Cost of goods sold ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Goods Sold (US$ in thousands)
- The cost of goods sold (COGS) exhibited a generally upward trend from 2019 through 2023, increasing from approximately 3,570,580 thousand USD to a peak of about 4,996,684 thousand USD. This consistent growth indicates higher production or sales volume over these years. However, in 2024 there was a noticeable decline to 4,447,051 thousand USD, suggesting a potential reduction in sales, improved cost efficiencies, or inventory adjustments.
- Accounts Payable (US$ in thousands)
- Accounts payable values fluctuated throughout the examined period, starting at 526,702 thousand USD in 2019 and showing minor variations in subsequent years. There was a peak in 2022 with balances reaching 612,512 thousand USD, followed by a decline in 2023 to 508,321 thousand USD, and then rising again in 2024 to 607,877 thousand USD. These fluctuations may reflect changes in purchasing cycles, supplier payment terms, or cash management strategies.
- Payables Turnover Ratio
- The payables turnover ratio, which measures the frequency with which the company pays off its suppliers, showed an overall increase from 6.78 in 2019 to a high of 9.83 in 2023. This suggests that in 2023 the company was paying its payables more rapidly compared to prior years. However, in 2024 this ratio declined to 7.32, indicating a slower payment pace or change in supplier credit terms. The volatility in this ratio points to adjustments in the company’s working capital management practices over time.
Working Capital Turnover
Williams-Sonoma Inc., working capital turnover calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current assets | |||||||
| Less: Current liabilities | |||||||
| Working capital | |||||||
| Net revenues | |||||||
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | |||||||
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Working Capital Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Working Capital Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Working capital turnover = Net revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibited considerable fluctuations over the observed periods. It started at 619,531 thousand USD in early 2019, decreased substantially to 146,080 thousand USD by early 2020, then recovered to levels close to the initial amount in early 2021. The value slightly declined in 2022 and 2023 before reaching the highest level of 839,482 thousand USD by early 2024, indicating increased liquidity and short-term financial strength.
- Net Revenues
- Net revenues showed a general upward trajectory from 2019 to 2023. Revenues increased steadily from approximately 5.67 billion USD in 2019 to a peak of around 8.67 billion USD in 2023. However, a notable decrease occurred in 2024, where revenues dropped to about 7.75 billion USD, indicating a reversal in growth momentum after several years of expansion.
- Working Capital Turnover
- The working capital turnover ratio displayed significant volatility across the periods. After an initial ratio of 9.15 in 2019, it spiked to 40.38 in 2020, suggesting a sharp increase in revenue generation efficiency relative to working capital at that point. This ratio then normalized to figures ranging between approximately 10.96 and 21.71 over the following years, peaking again in 2023 before declining sharply to 9.23 in 2024. The fluctuations imply variations in how effectively the company utilized its working capital to generate revenues, with the 2024 ratio reflecting a decrease in such efficiency.
Average Inventory Processing Period
Williams-Sonoma Inc., average inventory processing period calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | |||||||
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | |||||||
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Average Inventory Processing Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Average Inventory Processing Period, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio demonstrated an overall upward trend from 3.17 in 2019 to a peak of 4.12 in 2021, indicating improved efficiency in inventory management during this period. However, following 2021, the ratio declined to 3.7 in 2022 and further to 3.43 in 2023, before a slight recovery to 3.57 in 2024. This pattern suggests a peak in turnover efficiency in 2021, followed by a period of reduced inventory velocity, with only modest improvement in the most recent year.
- Average Inventory Processing Period
- The average inventory processing period exhibited an inverse pattern to the inventory turnover. It decreased steadily from 115 days in 2019 to a low of 89 days in 2021, reflecting a faster inventory turnover and potentially enhanced operational efficiency. After 2021, the period increased again to 99 days in 2022 and went up further to 106 days in 2023, before slightly dropping to 102 days in 2024. This indicates a lengthening in the time inventory remains on hand following the efficiency peak in 2021, consistent with the downward trend in inventory turnover during the same period.
Average Receivable Collection Period
Williams-Sonoma Inc., average receivable collection period calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | |||||||
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | |||||||
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Average Receivable Collection Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Average Receivable Collection Period, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio exhibited fluctuations over the six-year period. It started at 52.96 in 2019 and showed a slight decrease to 52.78 in 2020, followed by a more noticeable decline to 47.19 in 2021. However, a significant increase occurred in 2022, reaching 62.62, continuing to rise sharply to a peak of 74.98 in 2023. In 2024, there was a moderate decline to 63.06. This pattern suggests variability in the company's efficiency in collecting receivables, with a notable peak in 2023 indicating particularly strong collection performance during that year.
- Average Receivable Collection Period
- The average receivable collection period shows an inverse trend relative to the turnover ratio, consistent with financial theory. It began at 7 days in both 2019 and 2020, increased slightly to 8 days in 2021, then decreased to a low of 5 days in 2023 before slightly rising to 6 days in 2024. The reduction in collection days during 2022 and 2023 corresponds to the increase in the receivables turnover ratio, implying improved collection efficiency during these years. The marginal increase to 6 days in 2024 suggests a slight easing in collection terms or changes in customer payment behavior.
- Overall Analysis
- The data indicates that the company experienced varying efficiency in managing its receivables over the period. After a dip in efficiency around 2021, the company significantly improved its receivables turnover and shortened the collection period in subsequent years, peaking in 2023. The improvement in these metrics suggests enhanced cash flow management and possibly stronger credit control policies. The slight reversal in 2024 may indicate a stabilization or adjustment of collection practices but remains generally favorable compared to earlier years.
Operating Cycle
Williams-Sonoma Inc., operating cycle calculation, comparison to benchmarks
No. days
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | |||||||
| Average receivable collection period | |||||||
| Short-term Activity Ratio | |||||||
| Operating cycle1 | |||||||
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Operating Cycle, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Operating Cycle, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a fluctuating trend over the reported years. It initially decreases significantly from 115 days in 2019 to a low of 89 days in 2021, indicating improved inventory turnover efficiency during that period. However, this is followed by an increase to 106 days in 2023 and a slight decrease again to 102 days in 2024. This fluctuation suggests some variability in how quickly inventory is being processed, with a relatively higher processing duration returning in recent years compared to the low in 2021.
- Average Receivable Collection Period
- The average receivable collection period remains relatively stable and low across the years, indicating consistent and efficient collection practices. It remains steady at 7 days in 2019 and 2020, peaks slightly at 8 days in 2021, then improves to a minimum of 5 days in 2023 before rising marginally to 6 days in 2024. This suggests a generally prompt collection cycle throughout the period, with minor variability but overall maintaining effectiveness in receivables management.
- Operating Cycle
- The operating cycle follows a trend similar to the inventory processing period, reflecting the combined effect of inventory turnover and receivable collections. It decreases from 122 days in 2019 to a trough of 97 days in 2021, indicating improved overall operational efficiency. Following this, it rises again to 111 days in 2023 and then slightly decreases to 108 days in 2024. This pattern implies that although there was an enhancement in operational efficiency up to 2021, some elongation of the operating cycle occurred afterward, but it remains somewhat improved relative to the earlier years.
Average Payables Payment Period
Williams-Sonoma Inc., average payables payment period calculation, comparison to benchmarks
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | |||||||
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | |||||||
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Average Payables Payment Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Average Payables Payment Period, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio generally increased from 6.78 in February 2019 to a peak of 9.83 in January 2023, indicating that the company was paying off its suppliers more frequently during this period. However, in January 2024, the ratio declined to 7.32, suggesting a slowdown in payables turnover compared to the previous year but still remaining higher than the initial years.
- Average Payables Payment Period
- The average payable payment period demonstrated a decreasing trend from 54 days in February 2019 to a low of 37 days in January 2023, reflecting that the company was reducing the time it took to pay its suppliers over this period. In January 2024, the payment period lengthened to 50 days, indicating a reversal from the previous year's reduction but still shorter than the beginning of the period under review.
- Overall Insights
- There is a clear inverse relationship between payables turnover and the average payables payment period, consistent with expectations. The data reflect an improvement in payment efficiency up to early 2023, followed by a noticeable moderation in payment speed in the latest year. This suggests the company, after accelerating supplier payments, adjusted to a slightly more extended payment cycle in the most recent period, which could reflect changes in cash management strategies or supplier terms.
Cash Conversion Cycle
Williams-Sonoma Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | Feb 3, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | |||||||
| Average receivable collection period | |||||||
| Average payables payment period | |||||||
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | |||||||
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Cash Conversion Cycle, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Cash Conversion Cycle, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period exhibited a declining trend from 115 days in early 2019 to a low of 89 days in early 2021, indicating improved inventory turnover efficiency during this period. However, this metric increased again to 99 days in 2022 and further to 106 days in 2023, before slightly decreasing to 102 days in early 2024. This fluctuation suggests some challenges or shifts in inventory management in recent years, with performance not consistently maintaining the earlier improvements.
- Receivable Collection Period
- The average receivable collection period remained relatively stable and low throughout the timeframe, fluctuating narrowly between 5 and 8 days. There was a slight increase from 7 to 8 days between 2019 and 2021, but it subsequently decreased to 5 days in 2023 and slightly rose back to 6 days in 2024. This indicates consistent and efficient management of accounts receivable with minimal changes.
- Payables Payment Period
- The average payables payment period showed a gradual decline from 54 days in 2019 to 48 days in 2021, reflecting a moderately faster payment to suppliers. A sharper decrease occurred in 2023 to 37 days, before rising again to 50 days in 2024. These movements suggest variations in payment policies, potentially reflecting cash management strategies or supplier negotiation dynamics.
- Cash Conversion Cycle
- The cash conversion cycle displayed an overall improvement from 68 days in 2019 to a low of 49 days in 2021, signaling enhanced efficiency in converting investments in inventory and receivables into cash. However, it increased substantially to 74 days in 2023, indicating a slowdown in cash conversion, before improving again to 58 days in 2024. This volatility mirrors the mixed trends observed in inventory processing and payables payment periods, implying fluctuating operational efficiency in the short-term working capital cycle.