Dollar Tree Inc (DLTR)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.43 | 93.84 | 84.00 | 82.56 | 89.77 | 87.51 | 97.46 | 97.69 | 94.62 | 93.96 | 89.50 | 90.47 | 97.50 | 106.44 | 108.58 | 110.35 | 105.36 | 103.69 | 91.77 | 83.07 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | 34.23 | — | — | 32.89 | — | 31.32 | — | 28.27 | — | 35.18 | — | 36.36 | — | 38.46 | — | — |
| Cash conversion cycle | days | 86.43 | 93.84 | 84.00 | 82.56 | 55.54 | 87.51 | 97.46 | 64.79 | 94.62 | 62.64 | 89.50 | 62.20 | 97.50 | 71.26 | 108.58 | 73.99 | 105.36 | 65.22 | 91.77 | 83.07 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 86.43 + — – —
= 86.43
The cash conversion cycle of Dollar Tree Inc has fluctuated over the past few years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital.
Analyzing the data provided, we can see that Dollar Tree Inc's cash conversion cycle varied between 55.54 days and 108.58 days during the period from January 31, 2022, to January 31, 2025. The company experienced a peak in its cash conversion cycle on October 31, 2022, at 108.58 days and a low on February 3, 2024, at 55.54 days. Variations in the cash conversion cycle can be attributed to changes in inventory management, accounts receivable, and accounts payable.
Overall, Dollar Tree Inc should aim to minimize its cash conversion cycle to optimize its working capital efficiency and improve cash flow management. Monitoring and controlling factors contributing to the cycle, such as inventory turnover and accounts receivable collection, can help the company enhance its financial performance and liquidity position.
Peer comparison
Jan 31, 2025