Five Below Inc (FIVE)

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	68.23	90.75	66.72	67.57	68.92	94.50	78.09	70.56	65.39	79.09	55.54	56.38	55.46	92.26	66.48	83.69	71.00	109.68	73.83	78.53
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	29.91	41.53	30.57	29.65	28.88	37.69	36.51	32.23	28.23	38.52	26.82	29.23	27.34	50.96	27.44	31.31	28.54	49.19	29.42	32.90
Cash conversion cycle	days	38.32	49.22	36.15	37.92	40.04	56.80	41.58	38.33	37.16	40.57	28.72	27.15	28.13	41.29	39.04	52.38	42.46	60.49	44.41	45.63

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.23 + — – 29.91
= 38.32

The cash conversion cycle of Five Below Inc has shown some fluctuations over the past several quarters. It measures the time it takes for the company to convert its investments in inventory into cash inflows from sales.

The company's cash conversion cycle ranged from a low of 27.15 days in July 2021 to a high of 60.49 days in August 2019. A lower number indicates that the company is able to generate cash more quickly from its operations, while a higher number suggests a longer period between investing in inventory and receiving cash from sales.

Overall, the company's cash conversion cycle has been relatively stable over the past few quarters, with some slight fluctuations within the range of approximately 27 to 60 days. It is important for Five Below Inc to continuously monitor and optimize its cash conversion cycle to ensure efficient management of working capital and maximize cash flow from operations.