BJs Wholesale Club Holdings Inc (BJ)

Cash conversion cycle

Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Feb 3, 2024 Jan 31, 2024 Oct 31, 2023 Oct 28, 2023 Jul 31, 2023 Jul 29, 2023 Apr 30, 2023 Apr 29, 2023 Jan 31, 2023 Jan 28, 2023 Oct 31, 2022 Oct 29, 2022 Jul 31, 2022 Jul 30, 2022 Apr 30, 2022 Jan 31, 2022
Days of inventory on hand (DOH) days 32.91 37.37 33.06 33.22 31.55 32.17 37.49 37.91 35.54 35.63 35.53 35.38 31.71 31.28 33.68 34.10 31.89 33.34 37.32 32.25
Days of sales outstanding (DSO) days — — — — 4.18 — — 4.19 — 3.78 — 4.11 — 4.47 — 4.72 — 4.08 — —
Number of days of payables days — — — — 25.66 — — 30.09 — 28.37 — 29.60 — 27.13 — 30.91 — 30.11 — —
Cash conversion cycle days 32.91 37.37 33.06 33.22 10.07 32.17 37.49 12.01 35.54 11.04 35.53 9.90 31.71 8.62 33.68 7.91 31.89 7.31 37.32 32.25

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.91 + — – —
= 32.91

The cash conversion cycle is a crucial metric that measures the time it takes for a company to convert its investments in inventory into cash flows from sales. For BJs Wholesale Club Holdings Inc, the cash conversion cycle has exhibited some variation over the past few years.

Looking at the data provided, we see that the cash conversion cycle fluctuated between around 7 to 37 days during the period from January 2022 to January 2025. A lower number of days indicates more efficiency in converting inventory to sales and ultimately to cash, while a higher number may suggest inefficiencies in managing inventory, collection of receivables, and payment of payables.

Notably, we observe spikes and dips in the cash conversion cycle, which could be due to factors such as changes in sales patterns, inventory management practices, or payment terms with suppliers or customers.

Overall, it is important for BJs Wholesale Club Holdings Inc to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. By improving operational efficiency, the company can reduce the cash conversion cycle, which in turn can positively impact its liquidity and profitability.