Macy’s Inc (M)
Cash conversion cycle
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.11 | 65.27 | 68.65 | 60.22 | 76.64 |
| Days of sales outstanding (DSO) | days | 4.48 | 4.30 | 4.50 | 5.88 | 6.10 |
| Number of days of payables | days | 29.44 | 31.40 | 34.80 | 31.56 | 24.85 |
| Cash conversion cycle | days | 42.15 | 38.17 | 38.34 | 34.54 | 57.89 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.11 + 4.48 – 29.44
= 42.15
The cash conversion cycle of Macy's Inc has shown some fluctuations over the past five years. In the most recent fiscal year ending on February 3, 2024, the cash conversion cycle stood at 42.15 days, which was higher compared to the preceding fiscal year where it was 38.17 days. This indicates that, on average, it took Macy's Inc 42.15 days to convert its investments in inventory and other resources into cash received from sales and customer payments.
It is worth noting that the cash conversion cycle had increased compared to the previous year, which suggests that Macy's Inc may have experienced delays in converting its resources back into cash. This could be due to factors such as slower inventory turnover or extended customer payment periods.
Looking back at the trend over the past five years, there were fluctuations in the cash conversion cycle, with the lowest cycle of 34.54 days observed in the fiscal year ending January 30, 2021, and the highest cycle of 57.89 days reported in the fiscal year ending February 1, 2020. These fluctuations indicate variability in Macy's Inc efficiency in managing its working capital and liquidity.
Overall, a higher cash conversion cycle implies that Macy's Inc may be tying up resources for a longer period before realizing cash inflows, potentially indicating inefficiencies in its operations or working capital management. Monitoring and managing the cash conversion cycle is crucial for the company to optimize its cash flow and enhance overall financial performance.
Peer comparison
Feb 3, 2024