Nordstrom Inc (JWN)

Cash conversion cycle

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Days of inventory on hand (DOH)	days	81.73	128.93	74.08	70.71	138.21
Days of sales outstanding (DSO)	days	—	8.30	—	—	6.23
Number of days of payables	days	—	84.40	—	—	88.15
Cash conversion cycle	days	81.73	52.82	74.08	70.71	56.29

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.73 + — – —
= 81.73

The cash conversion cycle of Nordstrom Inc has exhibited some fluctuations over the years based on the provided data.

As of January 28, 2023, the cash conversion cycle was reported to be 56.29 days, indicating that the company took approximately 56.29 days to convert its investments in inventory into cash.

By January 31, 2023, the cash conversion cycle increased to 70.71 days, suggesting a lengthening of the time it took for Nordstrom to convert its investments in inventory back into cash.

During the subsequent year, as of January 31, 2024, the cash conversion cycle further extended to 74.08 days, indicating a slower pace in converting inventory into cash.

However, there was a significant improvement in Nordstrom's cash conversion cycle by February 3, 2024, with the cycle decreasing to 52.82 days. This improvement suggests that the company was more efficient in managing its inventory and collecting cash during this period.

By January 31, 2025, the cash conversion cycle increased substantially to 81.73 days, indicating a considerable delay in converting inventory investments into cash within Nordstrom's operations.

Overall, the trend in Nordstrom's cash conversion cycle reflects fluctuations in efficiency in managing inventory and cash collection processes over the specified periods. It is important for the company to closely monitor and manage its cash conversion cycle to optimize working capital and enhance overall financial performance.