BJs Wholesale Club Holdings Inc (BJ)

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	32.53	38.01	35.49	34.90	31.68	35.61	33.53	37.71	33.39	34.64	29.59	32.63	35.34	38.15	31.31	33.24	36.67	43.36	34.95	37.01
Days of sales outstanding (DSO)	days	4.30	4.20	3.78	4.08	4.54	4.92	4.11	4.45	3.82	4.50	3.93	4.66	4.09	4.60	4.31	5.11	5.71	5.17	4.51	5.03
Number of days of payables	days	26.45	30.17	28.25	29.20	27.48	32.28	30.29	32.68	29.89	34.09	29.48	29.80	28.97	35.49	31.29	32.12	26.67	33.20	27.19	27.98
Cash conversion cycle	days	10.37	12.04	11.01	9.78	8.74	8.25	7.35	9.48	7.32	5.05	4.04	7.49	10.47	7.26	4.33	6.23	15.72	15.33	12.28	14.07

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.53 + 4.30 – 26.45
= 10.37

The cash conversion cycle of BJs Wholesale Club Holdings Inc has fluctuated over the periods indicated. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From February 2020 to November 2021, the cash conversion cycle showed a decreasing trend, indicating a more efficient management of cash flows and working capital. This improvement suggests that the company was able to optimize its inventory management and reduce the time taken to convert its resources into sales revenue.

However, from November 2021 to February 2024, there was an overall increase in the cash conversion cycle. This could indicate challenges in managing working capital efficiently or possibly slower sales turnover impacting the company's cash flow cycle.

It is essential for BJs Wholesale Club Holdings Inc to closely monitor its cash conversion cycle to ensure efficient management of working capital, optimize inventory levels, and enhance cash flow generation. By analyzing the trends in the cash conversion cycle, the company can identify areas for improvement in its operational efficiency and financial performance.