G-III Apparel Group Ltd (GIII)

Cash conversion cycle

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Days of inventory on hand (DOH)	days	88.98	87.20	113.63	90.79	100.47	112.49	135.86	75.30	74.62	70.65	82.66	61.10	74.46	74.45	83.67	64.92	67.66	80.87	106.59	68.63
Days of sales outstanding (DSO)	days	66.31	98.87	59.28	57.43	76.34	102.87	58.21	71.18	79.72	121.09	59.65	85.67	87.65	115.42	39.09	52.49	61.29	103.54	54.47	56.42
Number of days of payables	days	31.21	26.44	41.55	20.17	24.01	27.86	57.19	29.50	34.52	36.80	41.77	20.11	24.88	25.42	27.98	14.89	25.11	26.75	43.87	22.01
Cash conversion cycle	days	124.08	159.62	131.36	128.04	152.80	187.50	136.87	116.98	119.82	154.94	100.54	126.65	137.23	164.45	94.78	102.52	103.85	157.66	117.18	103.05

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 88.98 + 66.31 – 31.21
= 124.08

The cash conversion cycle of G-III Apparel Group Ltd has shown fluctuations over the past few periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From Jan 31, 2020, to Jan 31, 2021, there was an increasing trend in the cash conversion cycle, reaching a peak of 164.45 days in Oct 31, 2020. This indicates that the company took longer to convert its investments into cash during this period, which may have resulted in reduced liquidity.

Subsequently, there was a significant improvement in the cash conversion cycle from Jul 31, 2021, to Apr 30, 2022, where the cycle decreased to around 100-120 days. This indicates that the company was able to more efficiently convert its resources into cash during this period, possibly through better inventory management or improved sales collections.

However, there was a slight increase in the cash conversion cycle in the most recent period ending Jan 31, 2024. The cycle increased to 124.08 days, which may raise concerns about the company's ability to manage its working capital effectively.

Overall, it is essential for G-III Apparel Group Ltd to focus on optimizing its cash conversion cycle to ensure efficient use of its resources and maintain adequate liquidity levels to support its operations.