Helen of Troy Ltd (HELE)
Cash conversion cycle
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 166.33 | 136.82 | 141.69 | 160.35 | 150.05 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 166.33 | 136.82 | 141.69 | 160.35 | 150.05 |
February 28, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 166.33 + — – —
= 166.33
The cash conversion cycle of Helen of Troy Ltd has shown fluctuations over the past five years. It has increased from 150.05 days on February 28, 2021, to 166.33 days on February 28, 2025. This indicates that the company's management of its working capital has become less efficient over time.
The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales. A longer cash conversion cycle suggests that the company is taking longer to collect revenue from its sales and convert it into cash. This can lead to potential liquidity issues and inefficiencies in the company's operations.
It is important for Helen of Troy Ltd to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. Strategies such as improving inventory turnover, speeding up accounts receivable collection, and managing accounts payable effectively can help in reducing the cash conversion cycle and improving overall liquidity and financial performance.