Bath & Body Works Inc. (BBWI)
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 | 42.12 | 41.85 | 44.06 | 19.84 | 36.36 |
| Days of sales outstanding (DSO) | days | 11.49 | 11.44 | 12.00 | 8.65 | 8.94 |
| Number of days of payables | days | 22.55 | 26.86 | 27.03 | 11.97 | 18.28 |
| Cash conversion cycle | days | 31.07 | 26.43 | 29.03 | 16.52 | 27.02 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 42.12 + 11.49 – 22.55
= 31.07
The cash conversion cycle of Bath & Body Works Inc. has fluctuated over the past five years. In the most recent fiscal year, ending on February 3, 2024, the cash conversion cycle was 31.07 days, indicating that, on average, it takes about a month for the company to convert its investments in inventory and other resources into cash from sales.
Compared to the previous year, there was an increase in the cash conversion cycle from 26.43 days to 31.07 days. This suggests that Bath & Body Works Inc. took longer to convert its resources into cash in the most recent year, which may have implications for its liquidity and working capital management.
Looking back further, the trend in the cash conversion cycle shows variability. For example, in fiscal year 2020, the cycle was 27.02 days, demonstrating an increase in efficiency compared to fiscal year 2024. However, in fiscal year 2021, the cycle decreased significantly to 16.52 days, indicating a more rapid conversion of resources into cash.
Overall, Bath & Body Works Inc. should continue to monitor and manage its cash conversion cycle to ensure efficient utilization of resources and maintain adequate liquidity levels. fluctuations in the cycle could suggest changes in operational efficiency, inventory management practices, or payment terms with customers and suppliers.
Peer comparison
Feb 3, 2024