Dave & Buster’s Entertainment (PLAY)

Cash conversion cycle

		Feb 4, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Days of inventory on hand (DOH)	days	40.29	53.65	71.80	116.01	53.94
Days of sales outstanding (DSO)	days	4.04	4.97	19.06	58.59	0.63
Number of days of payables	days	128.45	100.08	111.28	177.37	102.25
Cash conversion cycle	days	-84.12	-41.47	-20.42	-2.78	-47.68

February 4, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.29 + 4.04 – 128.45
= -84.12

The cash conversion cycle of Dave & Buster’s Entertainment has fluctuated over the past five years.

In 2024, the company's cash conversion cycle was negative 84.12 days, indicating that it takes, on average, 84.12 days to convert raw materials into cash from sales. This represents an increase in the cash conversion cycle compared to the previous year.

In 2023, the cash conversion cycle was negative 41.47 days, suggesting that the company is efficient in managing its working capital and turning inventory into sales. The decrease in the cash conversion cycle from the previous year indicates an improvement in the company's operations.

In 2022, the cash conversion cycle was negative 20.42 days, reflecting a shorter period for the company to convert its working capital into cash from sales. This also signifies an improvement in efficiency compared to the previous year.

In 2021, the cash conversion cycle was negative 2.78 days, indicating that the company was able to quickly convert its inventory and accounts receivable into cash. This was a significant improvement from the negative 47.68 days in 2020.

Although the company has experienced fluctuations in its cash conversion cycle over the years, it is important to analyze the underlying factors contributing to these changes to assess the overall efficiency of Dave & Buster’s Entertainment in managing its working capital and cash flow.