Chewy Inc (CHWY)
Cash conversion cycle
| Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 29.57 | 27.90 | 26.20 | 25.16 | 25.31 | 26.80 | 27.49 | 26.33 | 26.99 | 28.96 | 25.22 | 24.52 | 27.97 | 24.62 | 25.19 | 27.87 | 28.57 | 29.10 | 31.51 | 24.83 |
| Days of sales outstanding (DSO) | days | 6.16 | 6.48 | 5.59 | 5.05 | 5.34 | 5.50 | 5.30 | 4.57 | 4.74 | 5.55 | — | 5.17 | 6.40 | — | — | 6.26 | — | — | — | — |
| Number of days of payables | days | 42.33 | 40.98 | 39.83 | 38.66 | 38.33 | 40.63 | 41.87 | 40.04 | 39.42 | 42.93 | — | 38.64 | 46.83 | — | — | 42.26 | — | — | — | — |
| Cash conversion cycle | days | -6.61 | -6.59 | -8.03 | -8.45 | -7.68 | -8.34 | -9.08 | -9.14 | -7.69 | -8.42 | 25.22 | -8.95 | -12.46 | 24.62 | 25.19 | -8.13 | 28.57 | 29.10 | 31.51 | 24.83 |
October 27, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.57 + 6.16 – 42.33
= -6.61
The cash conversion cycle of Chewy Inc fluctuated over the periods analyzed. A negative cash conversion cycle indicates that the company is able to convert its inventory into cash and receive payments from customers before paying its suppliers. This can be an advantageous position as it shows efficient management of working capital.
Chewy Inc had a stable negative cash conversion cycle for most of the periods, indicating a healthy liquidity position and efficient management of inventory, accounts receivable, and accounts payable. However, there was a significant increase in the cash conversion cycle in the periods ending May 1, 2022, January 31, 2021, November 1, 2020, August 2, 2020, and May 3, 2020, suggesting a potential liquidity or operational issue during those times.
Overall, the negative cash conversion cycle trend reflects Chewy Inc's ability to manage its working capital effectively, with the company consistently collecting cash from customers and converting inventory to cash faster than paying its suppliers. Despite some fluctuations, the company has demonstrated sound financial health and efficient operational management.
Peer comparison
Oct 27, 2024