Kontoor Brands Inc (KTB)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	62.47	74.58	79.09	80.28	79.34	94.02	98.38	105.20	95.15	109.78	86.26	71.59	60.36	68.21	69.24	62.45	62.02	78.85	76.21	79.21
Days of sales outstanding (DSO)	days	34.06	32.71	29.40	34.38	30.80	32.78	26.21	31.58	31.65	33.70	26.11	40.86	43.45	39.89	32.82	35.89	40.26	39.53	26.43	32.54
Number of days of payables	days	28.77	32.62	31.82	29.98	28.58	28.34	30.65	26.12	32.88	49.58	45.12	44.15	35.62	40.79	34.12	34.76	30.44	37.86	19.14	24.30
Cash conversion cycle	days	67.77	74.67	76.68	84.68	81.57	98.46	93.95	110.66	93.92	93.90	67.25	68.30	68.19	67.31	67.94	63.58	71.84	80.52	83.50	87.45

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.47 + 34.06 – 28.77
= 67.77

The cash conversion cycle of Kontoor Brands Inc has fluctuated over the periods provided, indicating changes in the efficiency of its cash management and working capital. The trend shows a gradual decrease from 87.45 days on March 31, 2020, to 67.25 days on June 30, 2022, signifying an improvement in the company's ability to convert its inventory and receivables into cash.

However, there was a significant increase in the cash conversion cycle from September 30, 2022, reaching a peak of 110.66 days on March 31, 2023. This spike suggests potential challenges in managing working capital effectively during that period.

Subsequently, there was a decrease in the cash conversion cycle, stabilizing around the range of 67 to 84 days from June 30, 2023, to December 31, 2024. This indicates a return to a more optimal level of managing cash flow, inventory, and receivables.

Overall, monitoring the cash conversion cycle is crucial for Kontoor Brands Inc to ensure efficient utilization of resources and maintain a healthy liquidity position. Continued analysis and management of working capital will be essential to sustain and improve the company's financial performance.