Dick’s Sporting Goods Inc (DKS)
Cash conversion cycle
| 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 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 87.31 | 102.58 | 90.15 | 98.13 | 93.09 | 115.96 | 106.44 | 100.76 | 81.10 | 88.26 | 72.40 | 74.57 | 80.60 | 99.03 | 82.45 | 94.69 | 95.59 | 114.24 | 96.17 | 97.48 |
| Days of sales outstanding (DSO) | days | 3.34 | 4.32 | 4.46 | 4.37 | 2.36 | 2.77 | 2.60 | 2.37 | 2.09 | 2.74 | 2.79 | 2.29 | 2.28 | 3.12 | 3.18 | 4.52 | 2.22 | 2.98 | 2.74 | 2.26 |
| Number of days of payables | days | 39.50 | 50.95 | 41.75 | 39.46 | 39.66 | 50.83 | 52.91 | 53.22 | 45.23 | 49.60 | 43.69 | 45.94 | 51.91 | 59.54 | 48.11 | 38.15 | 43.48 | 48.72 | 40.81 | 42.42 |
| Cash conversion cycle | days | 51.15 | 55.96 | 52.86 | 63.05 | 55.79 | 67.89 | 56.13 | 49.91 | 37.96 | 41.39 | 31.51 | 30.93 | 30.97 | 42.61 | 37.51 | 61.05 | 54.34 | 68.49 | 58.11 | 57.33 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.31 + 3.34 – 39.50
= 51.15
The cash conversion cycle of Dick’s Sporting Goods Inc shows fluctuations over the specified periods. The company's cash conversion cycle measures the time it takes to convert its investments in inventory and other resources into cash flows from sales.
The trend indicates that Dick’s Sporting Goods Inc has varied in its efficiency in managing its working capital over the analyzed periods. The company's cash conversion cycle ranged from a low of 31.51 days to a high of 68.49 days. Lower numbers are preferable as they indicate the company is efficiently managing its cash flow and working capital.
The company should aim to reduce its cash conversion cycle by streamlining its inventory management, improving its accounts receivable collection process, and possibly negotiating better payment terms with suppliers. By doing so, Dick’s Sporting Goods Inc can strive to improve its liquidity and overall financial health.
Peer comparison
Feb 3, 2024