Movado Group Inc (MOV)
Cash conversion cycle
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.10 | 105.82 | 93.25 | 82.48 | 92.77 |
| Days of sales outstanding (DSO) | days | 62.97 | 51.10 | 49.58 | 73.33 | 40.96 |
| Number of days of payables | days | 19.06 | 18.23 | 26.77 | 15.24 | 19.21 |
| Cash conversion cycle | days | 130.01 | 138.68 | 116.06 | 140.58 | 114.52 |
January 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 86.10 + 62.97 – 19.06
= 130.01
The cash conversion cycle of Movado Group Inc has shown some fluctuations over the past five years. In January 2024, the company's cash conversion cycle decreased to 130.01 days compared to the previous year, indicating an improvement in managing its cash flow and working capital. This improvement suggests that Movado Group Inc has been more efficient in converting its invested resources into cash during the latest fiscal year.
Looking back at the data, the cash conversion cycle was relatively high in January 2023 at 138.68 days, but decreased in January 2022 to 116.06 days, reflecting a positive trend in cash management. However, in January 2021, the cash conversion cycle increased to 140.58 days, indicating challenges in efficiently managing the conversion of inventory into sales and then into cash during that year.
Movado Group Inc had its best performance in the cash conversion cycle in January 2020, with a cycle of 114.52 days, showing that the company effectively managed its cash flow and working capital, resulting in a shorter cash conversion cycle compared to the other years analyzed.
Overall, Movado Group Inc should continue to monitor and assess its cash conversion cycle to ensure efficient management of working capital, inventory, and accounts receivables, ultimately aiding in improving the company's liquidity and financial health.