Burlington Stores Inc (BURL)
Cash conversion cycle
| Feb 1, 2025 | Nov 2, 2024 | Aug 3, 2024 | May 4, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 47.62 | 55.50 | 48.06 | 45.96 | 44.69 | 56.59 | 50.56 | 54.53 | 53.45 | 66.16 | 56.76 | 55.77 | 44.82 | 52.87 | 49.35 | 59.73 | 75.79 | 89.51 | 60.81 | 56.10 |
| Days of sales outstanding (DSO) | days | 3.02 | 3.58 | 3.55 | 3.69 | 2.79 | 3.58 | 3.24 | 3.21 | 2.98 | 3.44 | 2.93 | 3.13 | 2.12 | 3.68 | 3.44 | 4.25 | 3.94 | 4.67 | 3.16 | 0.70 |
| Number of days of payables | days | 39.52 | 42.45 | 39.99 | 37.46 | 39.29 | 40.01 | 33.67 | 36.73 | 43.22 | 43.66 | 35.88 | 42.69 | 47.44 | 58.58 | 58.40 | 70.57 | 88.26 | 95.08 | 49.28 | 62.91 |
| Cash conversion cycle | days | 11.12 | 16.63 | 11.62 | 12.19 | 8.19 | 20.16 | 20.13 | 21.02 | 13.21 | 25.93 | 23.81 | 16.21 | -0.51 | -2.03 | -5.61 | -6.59 | -8.53 | -0.91 | 14.69 | -6.11 |
February 1, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.62 + 3.02 – 39.52
= 11.12
The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates faster efficiency in managing working capital and liquidity.
Analyzing the data provided for Burlington Stores Inc, we observe fluctuations in the cash conversion cycle over the periods indicated. Initially, the company had negative cash conversion cycles, which means it was able to convert its investments into cash quickly, efficiently managing its working capital.
However, as we progress through the data, there is a shift towards positive cash conversion cycles, indicating the company's slower efficiency in converting investments into cash. The cycle fluctuates over time, with periods of improvement followed by periods where the cycle lengthens, suggesting potential challenges in managing liquidity and working capital effectively.
Of particular note are the significant increases in the cash conversion cycle in April 2022, July 2022, and October 2022, reaching 16.21 days, 23.81 days, and 25.93 days, respectively. These longer cycles could signify inventory management issues, delays in receivables collection, or extended payment periods to suppliers.
Subsequently, the company shows some improvements in managing the cash conversion cycle, as seen in the decreasing cycle lengths towards the end of the data series. However, it is essential for Burlington Stores Inc to monitor and address factors contributing to longer cash conversion cycles to ensure optimal working capital management and sustained liquidity in the future.
Peer comparison
Feb 1, 2025