Hanesbrands Inc (HBI)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	100.76	107.13	127.61	136.95	126.40	132.15	128.77	109.01	93.71	89.33	82.81	80.92	76.41	122.39	109.42	118.69	134.63	161.89	190.74	192.87
Days of sales outstanding (DSO)	days	36.12	44.76	41.93	—	42.24	51.93	50.54	47.74	48.02	50.31	51.95	43.74	42.81	54.35	65.48	39.54	42.71	54.03	53.02	49.20
Number of days of payables	days	54.23	55.79	66.62	67.16	58.58	69.94	76.20	72.13	71.87	67.97	63.39	53.07	49.83	66.72	67.93	58.19	67.75	77.05	88.10	87.03
Cash conversion cycle	days	82.65	96.10	102.91	69.79	110.06	114.14	103.11	84.62	69.86	71.66	71.37	71.60	69.39	110.02	106.97	100.04	109.60	138.88	155.66	155.05

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 100.76 + 36.12 – 54.23
= 82.65

The cash conversion cycle for Hanesbrands Inc has shown some fluctuations over the past few quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in raw materials and other resources into cash flows from sales.

In the most recent quarter, the cash conversion cycle stood at 82.65 days, indicating that it took the company approximately 82.65 days to convert its investments into cash from sales. This represents an improvement compared to the previous quarter where the cycle was 96.10 days.

Looking further back, we observe that the cash conversion cycle has fluctuated between a range of 69.39 days to 155.66 days over the past few years. The company seems to have experienced some challenges with managing its working capital efficiently, as evidenced by the longer cycles observed in some quarters.

It is essential for Hanesbrands Inc to focus on optimizing its cash conversion cycle to improve cash flow management and operational efficiency. Shortening the cycle can lead to better liquidity, reduced reliance on external financing, and improved overall financial health. Monitoring and addressing factors impacting the cycle, such as inventory turnover, accounts payable, and accounts receivable management, can help the company enhance its cash conversion efficiency.