Kohl's Corporation (KSS)
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 | 66.42 | 62.72 | 93.46 | 101.60 | 65.12 |
| Days of sales outstanding (DSO) | days | — | 3.56 | — | — | 4.31 |
| Number of days of payables | days | — | 24.70 | — | — | 27.16 |
| Cash conversion cycle | days | 66.42 | 41.58 | 93.46 | 101.60 | 42.27 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.42 + — – —
= 66.42
The cash conversion cycle measures the time it takes for a company like Kohl's Corporation to convert its investment in inventory and other resources into cash flow from sales. Looking at the data provided, we observe fluctuations in Kohl's cash conversion cycle over the years:
1. As of January 28, 2023, Kohl's cash conversion cycle stood at 42.27 days, reflecting a relatively efficient process of converting resources into cash within a shorter period.
2. By January 31, 2023, the cash conversion cycle had significantly increased to 101.60 days, indicating a potential delay in the conversion of inventory or receivables into cash, which could be a concerning trend.
3. By January 31, 2024, the cash conversion cycle decreased to 93.46 days, showing some improvement compared to the previous year. However, the cycle still remained higher than the initial period, suggesting ongoing challenges in the working capital management of the company.
4. On February 3, 2024, there was a notable decrease in the cash conversion cycle to 41.58 days, marking a substantial improvement and potentially signaling more efficient working capital management practices by Kohl's.
5. Finally, as of January 31, 2025, the cash conversion cycle increased slightly to 66.42 days, still lower than the peak in 2023 but indicating the need for continued monitoring and optimization of Kohl's inventory and cash flow processes.
Overall, the varying trends in Kohl's cash conversion cycle highlight the importance of effective working capital management in ensuring timely conversion of assets into cash, which ultimately impacts the company's liquidity and financial health.
Peer comparison
Jan 31, 2025