Five Below Inc (FIVE)

Cash conversion cycle

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Days of inventory on hand (DOH)	days	95.38	66.85	93.36	97.24	67.64
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	29.30	—	—	28.34
Cash conversion cycle	days	95.38	37.55	93.36	97.24	39.30

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.38 + — – —
= 95.38

The cash conversion cycle of Five Below Inc has shown fluctuations over the years based on the provided data.

- As of January 28, 2023, the cash conversion cycle stood at 39.30 days, indicating a relatively efficient cash management process.
- However, by January 31, 2023, the cash conversion cycle increased significantly to 97.24 days, suggesting potential issues in managing working capital effectively.
- The cycle improved by January 31, 2024, decreasing to 93.36 days, but still at a higher level compared to the initial period.
- By February 3, 2024, there was a notable decrease in the cash conversion cycle to 37.55 days, indicating an improvement in managing cash flows and working capital.
- Finally, by January 31, 2025, the cycle increased again to 95.38 days, signaling a potential challenge in efficiently converting inventory and receivables into cash.

Overall, the trend in the cash conversion cycle shows variability, with periods of efficiency and inefficiency in managing cash flows, inventory, and receivables. Monitoring and optimizing the cash conversion cycle is crucial for enhancing liquidity and operational efficiency in the long term.