Columbia Sportswear Company (COLM)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	85.12	121.28	87.34	158.99	144.86
Days of sales outstanding (DSO)	days	44.01	57.33	56.62	66.09	58.57
Number of days of payables	days	26.91	38.02	38.35	59.05	61.05
Cash conversion cycle	days	102.22	140.58	105.61	166.03	142.39

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 85.12 + 44.01 – 26.91
= 102.22

Columbia Sportswear Co.'s cash conversion cycle has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 150.29 days from 204.70 days in 2022, indicating an improvement in its efficiency in managing its working capital. This trend was also evident in 2021 when the cash conversion cycle decreased to 144.23 days compared to 166.03 days in 2020.

However, it is worth noting that in 2022, there was a significant increase in the cash conversion cycle compared to the prior year, which may suggest potential challenges in managing the company's cash flows or working capital efficiency during that period.

Overall, Columbia Sportswear Co. has shown variability in its cash conversion cycle over the years, with improvements in certain periods and challenges in others. Analyzing the reasons behind these fluctuations and implementing strategies to maintain a more consistent and efficient cash conversion cycle could be beneficial for the company's financial health and operational performance.