Guess? Inc. (GES)
Cash conversion cycle
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.68 | 76.38 | 118.65 | 120.43 | 86.32 |
| Days of sales outstanding (DSO) | days | 41.79 | 47.26 | 46.32 | 61.10 | 44.61 |
| Number of days of payables | days | 39.60 | 43.27 | 83.62 | 92.97 | 51.11 |
| Cash conversion cycle | days | 69.87 | 80.37 | 81.35 | 88.56 | 79.82 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.68 + 41.79 – 39.60
= 69.87
The cash conversion cycle of Guess? Inc. has exhibited different trends over the past five years.
From January 2020 to February 2024, the company was able to improve its cash conversion cycle by reducing it from 79.82 days to 69.87 days. This demonstrates improved efficiency in managing its cash flow from operations, inventory, and receivables.
The decreasing trend indicates that Guess? Inc. has been able to manage its working capital more effectively, potentially by streamlining its processes, negotiating better credit terms with suppliers, or improving inventory turnover.
A shorter cash conversion cycle generally suggests that the company is efficiently converting its investments in inventory into sales and then into cash, ultimately leading to improved liquidity.
By continuously monitoring and improving its cash conversion cycle, Guess? Inc. can enhance its financial performance and strengthen its overall financial position in the market.