Kontoor Brands Inc (KTB)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	79.38	95.15	60.36	62.25	69.74
Days of sales outstanding (DSO)	days	30.80	31.65	43.45	40.26	32.72
Number of days of payables	days	28.59	32.88	35.62	30.55	22.43
Cash conversion cycle	days	81.59	93.92	68.19	71.96	80.03

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.38 + 30.80 – 28.59
= 81.59

The cash conversion cycle of Kontoor Brands Inc has fluctuated over the past five years. In 2023, the cash conversion cycle decreased to 81.59 days from 93.92 days in 2022. This indicates that the company's ability to convert its resources into cash has improved, possibly due to more efficient management of inventory, accounts receivable, and accounts payable.

Comparing 2023 to 2021, the cash conversion cycle increased slightly from 68.19 days to 81.59 days. This suggests that there may have been challenges in managing working capital efficiently during that period. However, the cycle in 2023 is still lower than in 2021.

In 2020 and 2019, the cash conversion cycle was 71.96 days and 80.03 days, respectively. The company experienced a decrease in the cycle in 2020 compared to 2019, but it increased again in 2021 before improving in 2023.

Overall, the trend in the cash conversion cycle for Kontoor Brands Inc has been somewhat inconsistent, with fluctuations in performance over the past five years. It will be crucial for the company to continue monitoring and optimizing its working capital management processes to ensure efficient cash conversion in the future.