Dave & Buster’s Entertainment (PLAY)
Cash conversion cycle
| Feb 4, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 40.29 | 47.35 | 47.31 | 53.11 | 53.65 | 59.94 | 67.75 | 64.56 | 71.80 | 79.83 | 64.08 | 96.14 | 116.01 | 85.26 | 76.55 | 63.48 | 53.94 | 51.24 | 43.70 | 48.06 |
| Days of sales outstanding (DSO) | days | 4.05 | 1.09 | 5.91 | 3.77 | 4.96 | 10.03 | 8.33 | — | 19.05 | 23.84 | — | — | 58.59 | — | — | — | — | — | — | — |
| Number of days of payables | days | 128.45 | 76.11 | 75.35 | 70.97 | 100.09 | 75.48 | 97.27 | 84.62 | 111.28 | 84.20 | 92.11 | 166.13 | 177.37 | 136.66 | 146.13 | 144.57 | 102.25 | 102.95 | 85.94 | 79.32 |
| Cash conversion cycle | days | -84.12 | -27.67 | -22.13 | -14.08 | -41.48 | -5.51 | -21.19 | -20.06 | -20.43 | 19.47 | -28.03 | -69.99 | -2.78 | -51.40 | -69.58 | -81.09 | -48.31 | -51.71 | -42.24 | -31.25 |
February 4, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.29 + 4.05 – 128.45
= -84.12
The cash conversion cycle of Dave & Buster’s Entertainment fluctuated over the past several reporting periods, indicating variations in the efficiency of the company's operating cycle. The negative values suggest that the company's cash inflows occur before outflows, which can be advantageous as it reflects a shorter time it takes for the company to convert its investments in inventory and other resources into cash from sales.
From the data provided, there is evidence of inconsistency in the management of cash conversion cycle, with some periods showing inefficiencies in the company's working capital management. For instance, the cash conversion cycle was notably low at -84.12 days on Feb 4, 2024, indicating potential issues in managing payables, receivables, and inventory during that period.
Conversely, the cycle was more favorable at times, such as on Oct 30, 2022, where it was -5.51 days, suggesting strong control over working capital and efficient management of operating expenses and cash flow.
Overall, it is essential for Dave & Buster’s Entertainment to focus on maintaining a consistently low or negative cash conversion cycle to optimize its working capital efficiency, enhance liquidity, and ensure sustainable operations. Monitoring and improving this metric can lead to better cash flow management and increased profitability over time.
Peer comparison
Feb 4, 2024