Kontoor Brands Inc (KTB)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.49 | 79.38 | 95.15 | 60.36 | 62.25 |
| Days of sales outstanding (DSO) | days | 33.94 | 30.80 | 31.65 | 43.45 | 40.26 |
| Number of days of payables | days | 28.78 | 28.59 | 32.88 | 35.62 | 30.55 |
| Cash conversion cycle | days | 67.66 | 81.59 | 93.92 | 68.19 | 71.96 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.49 + 33.94 – 28.78
= 67.66
The cash conversion cycle of Kontoor Brands Inc has shown fluctuations over the past five years. In December 2020, the company had a cash conversion cycle of 71.96 days, indicating that it took nearly 72 days for the company to convert its investments in inventory and accounts receivable into cash receipts from customers.
By December 2021, the cash conversion cycle had improved slightly to 68.19 days, suggesting more efficient management of working capital. However, in December 2022, the cycle lengthened to 93.92 days, which may indicate challenges in efficiently managing inventory levels or collecting receivables.
The following year, by December 2023, there was a decrease in the cash conversion cycle to 81.59 days, showing some improvement in working capital management. Finally, by December 2024, the cycle decreased further to 67.66 days, signaling potentially enhanced efficiency in converting investments into cash.
Overall, fluctuations in the cash conversion cycle of Kontoor Brands Inc over the years reflect varying levels of efficiency in managing working capital. It is important for the company to continue monitoring and improving this metric to ensure optimal cash flow management and financial health.
Peer comparison
Dec 31, 2024