Crocs Inc (CROX)
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 | 47.67 | 48.78 | 55.51 | 61.37 | 63.19 | 77.40 | 86.16 | 80.27 | 47.31 | 49.52 | 53.25 | 56.80 | 53.82 | 58.04 | 49.70 | 64.12 | 56.20 | 46.66 | 45.99 | 48.48 |
| Days of sales outstanding (DSO) | days | 29.80 | 38.13 | 40.41 | 42.52 | 33.08 | 46.92 | 55.86 | 58.80 | 32.52 | 39.60 | 45.92 | 54.49 | 40.20 | 43.93 | 50.81 | 53.14 | 32.74 | 40.13 | 56.60 | 59.69 |
| Number of days of payables | days | 32.31 | 26.24 | 33.32 | 29.95 | 30.93 | 28.64 | 38.71 | 39.96 | 35.93 | 31.10 | 42.48 | 41.03 | 34.66 | 39.71 | 28.17 | 34.36 | 31.28 | 28.67 | 34.41 | 31.19 |
| Cash conversion cycle | days | 45.16 | 60.66 | 62.60 | 73.94 | 65.34 | 95.68 | 103.31 | 99.11 | 43.90 | 58.02 | 56.69 | 70.25 | 59.36 | 62.27 | 72.34 | 82.91 | 57.66 | 58.11 | 68.18 | 76.99 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.67 + 29.80 – 32.31
= 45.16
The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources back into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to generate cash more quickly, while a longer cycle suggests a slower turnover of assets.
Analyzing Crocs Inc's cash conversion cycle over the past eight quarters reveals fluctuations in efficiency. In Q4 2023, the cash conversion cycle was 56.36 days, indicating a relatively efficient process of converting inventory into cash. This represents an improvement compared to the previous quarter, Q3 2023, when the cycle was 75.76 days.
Looking further back, Q2 2023 and Q1 2023 also showed shorter cash conversion cycles of 77.65 days and 94.14 days, respectively. These results demonstrate a trend of increasing efficiency in cash conversion over the year.
Comparing current performance to the same quarter in the previous year, Q4 2022 had a cash conversion cycle of 85.65 days, suggesting an improvement in the company's working capital management.
However, it is important to note that there were periods of longer cash conversion cycles in the past, such as Q3 2022, Q2 2022, and Q1 2022, with cycles of 129.27 days, 138.04 days, and 133.67 days, respectively. These longer cycles may indicate potential inefficiencies in inventory management or slower cash flows from sales during those periods.
Overall, Crocs Inc's cash conversion cycle has shown fluctuations over the past eight quarters, with some quarters demonstrating improved efficiency in converting inventory into cash, while others indicating potential challenges in working capital management. Continued monitoring of the cash conversion cycle will be essential for assessing the company's ability to effectively manage its resources and generate cash flows.
Peer comparison
Dec 31, 2023