Bath & Body Works Inc. (BBWI)
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 | 42.13 | 71.37 | 47.97 | 45.18 | 41.85 | 117.05 | 92.61 | 57.89 | 50.42 | 48.14 | 26.80 | 24.51 | 20.06 | 28.13 | 58.31 | 56.15 | 46.52 | 135.81 | 91.40 | 92.82 |
| Days of sales outstanding (DSO) | days | 11.49 | 10.02 | 7.75 | 7.30 | 11.30 | 11.88 | 8.94 | 6.63 | 9.41 | 7.96 | 6.75 | 3.48 | 8.37 | 9.33 | 8.61 | 9.21 | 11.11 | 10.56 | 10.03 | 7.55 |
| Number of days of payables | days | 22.55 | 37.13 | 29.79 | 24.96 | 26.86 | 58.30 | 55.99 | 33.18 | 30.93 | 27.44 | 16.94 | 14.22 | 12.10 | 17.61 | 37.80 | 26.93 | 23.38 | 68.44 | 52.48 | 47.06 |
| Cash conversion cycle | days | 31.07 | 44.25 | 25.93 | 27.51 | 26.29 | 70.63 | 45.57 | 31.34 | 28.90 | 28.66 | 16.61 | 13.77 | 16.34 | 19.85 | 29.11 | 38.43 | 34.24 | 77.93 | 48.96 | 53.32 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 42.13 + 11.49 – 22.55
= 31.07
The cash conversion cycle of Bath & Body Works Inc. has experienced fluctuations over the past several periods. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, ranged from a low of 13.77 days to a high of 77.93 days.
The lower the cash conversion cycle, the more efficient the company is at managing its working capital. A shorter cycle indicates that the company is able to collect payments from customers quickly, manage its inventory effectively, and pay its suppliers in a timely manner. On the other hand, a longer cash conversion cycle suggests potential inefficiencies in working capital management.
Bath & Body Works Inc. experienced a significant increase in its cash conversion cycle in the period ending October 29, 2022, where it reached 70.63 days, indicating potential challenges in working capital management during that period. However, the company managed to significantly reduce its cash conversion cycle in subsequent periods, with the lowest cycle of 13.77 days recorded on January 30, 2021.
Overall, Bath & Body Works Inc. should continue to monitor and strive to improve its cash conversion cycle to enhance its working capital efficiency and overall financial performance.
Peer comparison
Feb 3, 2024