Carter’s Inc (CRI)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	222.41	285.62	302.07	252.48	358.60	159.01	192.83	196.78	185.90	287.12	204.27	182.04	173.64	130.74	131.72	103.86	107.82	132.31	127.90	96.46
Days of sales outstanding (DSO)	days	22.96	29.52	16.14	26.54	23.01	29.42	19.97	28.35	24.65	28.42	17.89	27.98	22.74	30.79	18.91	23.75	26.03	30.54	17.62	25.33
Number of days of payables	days	100.27	102.25	124.68	74.10	127.18	56.23	91.67	82.23	116.82	154.50	117.63	108.71	136.81	95.73	89.76	34.35	33.34	37.65	42.70	20.09
Cash conversion cycle	days	145.11	212.88	193.53	204.91	254.42	132.20	121.14	142.91	93.73	161.04	104.52	101.31	59.57	65.80	60.87	93.25	100.52	125.21	102.81	101.71

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 222.41 + 22.96 – 100.27
= 145.11

The cash conversion cycle of Carter’s Inc fluctuated over the analyzed periods, indicating changes in the efficiency of its working capital management. A shorter cash conversion cycle implies that the company is able to convert its investments in inventory and receivables into cash more quickly.

Looking at the data, we observe that the cash conversion cycle ranged from a low of 59.57 days in March 2021 to a high of 254.42 days in December 2022. In general, the company has experienced some volatility in its cash conversion cycle, with periods of both shorter and longer cycles.

The significant increase in the cash conversion cycle in December 2022 could indicate potential issues with managing inventory or collecting receivables efficiently during that period. Conversely, the sharp decrease in the cycle in March 2021 suggests an improvement in working capital management.

Overall, monitoring and managing the cash conversion cycle is crucial for Carter’s Inc to optimize its cash flow and ensure efficient operations. The company should focus on strategies to streamline inventory management and enhance its collection processes to maintain a healthy cash conversion cycle.