Hanesbrands Inc (HBI)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 139.02 | 128.65 | 109.50 | 148.71 | 147.44 | 155.13 | 184.33 | 198.51 | 180.08 | 188.99 | 185.77 | 156.81 | 139.33 | 125.45 | 115.37 | 111.44 | 113.01 | 189.34 | 172.36 | 173.64 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 139.02 | 128.65 | 109.50 | 148.71 | 147.44 | 155.13 | 184.33 | 198.51 | 180.08 | 188.99 | 185.77 | 156.81 | 139.33 | 125.45 | 115.37 | 111.44 | 113.01 | 189.34 | 172.36 | 173.64 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 139.02 + — – —
= 139.02
The cash conversion cycle of Hanesbrands Inc has shown fluctuating trends over the analyzed period from March 31, 2020, to December 31, 2024. The company's cash conversion cycle, a measure of how quickly a company can convert its inventory into cash flows from sales, varied between 109.50 days and 198.51 days during this timeframe.
The cycle started at 173.64 days in March 2020, indicating that it took the company over 5 months to convert its investments in inventory into cash. Over the subsequent quarters, the cycle fluctuated, with a decreasing trend observed until March 2021, indicating an improvement in the company's efficiency in terms of inventory management and collection of receivables.
However, from September 2021 onwards, the cash conversion cycle started to increase, peaking at 198.51 days in March 2023. This increase suggests a potential delay in converting inventory into cash or collecting receivables, which could be a cause for concern.
The cycle decreased again by June 2024 to 109.50 days, reflecting a positive trend in working capital management. Overall, the company's cash conversion cycle seems to have experienced fluctuations in efficiency over the analyzed period, with periods of improvement followed by setbacks. This fluctuation may warrant further investigation into the company's operational processes and financial management practices.