Foot Locker Inc (FL)
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 | 68.74 | 119.09 | 115.99 | 110.33 | 101.23 | 104.29 | 102.35 | 85.80 | 78.69 | 80.32 | 67.18 | 63.93 | 84.75 | 110.04 | 214.26 | 6,822.69 | 6,889.38 | 15,353.55 | 13,995.47 | 21,048.33 |
| Days of sales outstanding (DSO) | days | 7.16 | — | — | — | 6.68 | — | — | — | 5.46 | — | — | — | 6.00 | — | — | — | 4.56 | — | — | — |
| Number of days of payables | days | 16.67 | 37.93 | 32.56 | 29.75 | 30.31 | 32.31 | 37.10 | 34.60 | 37.05 | 35.69 | 33.50 | 41.20 | 36.91 | 47.41 | 113.05 | 2,190.00 | 1,899.14 | 4,662.58 | 4,790.62 | 7,838.81 |
| Cash conversion cycle | days | 59.23 | 81.16 | 83.43 | 80.58 | 77.60 | 71.98 | 65.24 | 51.20 | 47.11 | 44.64 | 33.68 | 22.73 | 53.84 | 62.63 | 101.21 | 4,632.69 | 4,994.79 | 10,690.97 | 9,204.84 | 13,209.52 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.74 + 7.16 – 16.67
= 59.23
The cash conversion cycle of Foot Locker Inc has shown some fluctuations over the periods analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash received from sales. A lower cash conversion cycle indicates that the company is more efficient in managing its working capital.
Looking at the data provided, we can see that the cash conversion cycle has varied significantly, ranging from as low as 22.73 days to as high as 13,209.52 days. Such extreme values may be attributed to anomalies or data errors in the report, such as the exceptionally high figures recorded on August 1, 2020, and November 2, 2019.
However, focusing on the trends, it appears that the cash conversion cycle has generally decreased over the recent periods, indicating potential improvements in inventory management and collection of receivables. There was a notable decrease in the cash conversion cycle from fiscal year 2020 to 2021, suggesting better efficiency in working capital management during that period.
Further, the company seems to have experienced a significant improvement in its cash conversion cycle from fiscal year 2020 to 2021, followed by a steady decline until the most recent period. This trend suggests that Foot Locker Inc has been more effective in managing its inventory, accounts receivable, and accounts payable, resulting in quicker conversion of assets into cash.
Overall, it is essential for Foot Locker Inc to continue monitoring its cash conversion cycle and focus on maintaining or reducing it further to maximize cash flow efficiency and working capital management.
Peer comparison
Feb 3, 2024