Ollie's Bargain Outlet Hldg (OLLI)

Cash conversion cycle

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Days of inventory on hand (DOH)	days	148.59	98.47	145.33	146.68	101.26
Days of sales outstanding (DSO)	days	—	0.39	—	—	0.47
Number of days of payables	days	—	24.94	—	—	19.41
Cash conversion cycle	days	148.59	73.92	145.33	146.68	82.32

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 148.59 + — – —
= 148.59

The cash conversion cycle of Ollie's Bargain Outlet Holdings has shown fluctuations over the years. As of January 28, 2023, the company had a cash conversion cycle of 82.32 days, indicating a relatively efficient cash management process. However, by January 31, 2023, the cash conversion cycle increased significantly to 146.68 days, suggesting potential issues with managing the company's cash flow and working capital.

Subsequently, there was a slight improvement in the cash conversion cycle by January 31, 2024, standing at 145.33 days, but still reflecting a prolonged period for the company to convert its investments in inventory and receivables into cash. A notable positive change was witnessed by February 3, 2024, with a reduced cash conversion cycle of 73.92 days, signaling better efficiency in cash management and operations.

However, by January 31, 2025, the cash conversion cycle rose again to 148.59 days, indicating a regression in the company's cash conversion efficiency. Overall, the fluctuations in Ollie's Bargain Outlet Holdings' cash conversion cycle over the years highlight the importance of closely monitoring working capital management practices to ensure optimal cash flow operations and efficiency in converting assets into cash.