Abercrombie & Fitch Company (ANF)

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	107.96	137.52	114.88	105.03	115.84	175.18	170.52	138.94	137.02	145.97	114.41	109.18	119.50	154.79	123.85	110.94	107.68	164.60	136.64	126.52
Days of sales outstanding (DSO)	days	6.68	8.77	10.67	10.41	10.32	10.82	7.91	8.66	6.79	8.29	8.87	11.50	9.79	10.20	9.98	9.59	8.08	10.26	10.99	9.45
Number of days of payables	days	68.29	86.41	75.24	51.97	59.31	76.06	98.33	76.90	97.67	113.98	79.69	66.49	85.59	94.99	77.66	42.33	54.53	75.10	63.46	52.68
Cash conversion cycle	days	46.35	59.87	50.31	63.47	66.84	109.95	80.09	70.69	46.15	40.28	43.59	54.19	43.70	70.00	56.16	78.21	61.24	99.77	84.16	83.28

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 107.96 + 6.68 – 68.29
= 46.35

The cash conversion cycle of Abercrombie & Fitch Company fluctuated over the past few quarters, indicating variations in the company's efficiency in managing its cash, inventory, and receivables.

From February 3, 2024, to May 4, 2019, the company's cash conversion cycle ranged from a low of 40.28 days to a high of 109.95 days. The cycle peaked in the third quarter of 2022 at 109.95 days, suggesting a longer period required to convert the company's investments in inventory and accounts receivable into cash. This could indicate potential inefficiencies in managing working capital during that period.

On the other hand, the cycle decreased to a low of 40.28 days in the first quarter of 2022, indicating an improvement in efficiency in managing cash, inventory, and receivables. This could suggest better control over working capital and a quicker conversion of investments into cash during that period.

Overall, Abercrombie & Fitch showed fluctuating trends in its cash conversion cycle over the periods analyzed, showcasing the importance of closely monitoring working capital management practices to optimize operational efficiency and cash flows.