PVH Corp (PVH)

Working capital turnover

Feb 4, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020
Revenue US$ in thousands 9,217,700 9,024,200 9,154,700 7,132,600 9,909,000
Total current assets US$ in thousands 3,259,700 3,580,400 3,653,700 3,943,700 3,394,200
Total current liabilities US$ in thousands 2,771,500 2,767,500 2,787,500 2,582,400 2,361,100
Working capital turnover 18.88 11.10 10.57 5.24 9.59

February 4, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,217,700K ÷ ($3,259,700K – $2,771,500K)
= 18.88

The working capital turnover ratio for PVH Corp has shown a positive trend over the past five years, indicating an improvement in the efficiency of the company's working capital management. The ratio increased from 9.59 in February 2020 to 18.88 in February 2024.

This suggests that the company is generating more revenue relative to its working capital investment, which is a sign of operational efficiency. It indicates that PVH Corp is able to sell and replenish its inventory relatively quickly, convert its receivables into cash effectively, and manage its payables efficiently.

The significant increase in the working capital turnover ratio from 2020 to 2024 reflects a commendable improvement in the company's ability to utilize its working capital resources to support its operations and generate sales. PVH Corp's management may have implemented more efficient inventory management practices and enhanced its cash conversion cycle to achieve this positive trend.

Overall, the upward trend in PVH Corp's working capital turnover ratio demonstrates the company's focus on optimizing its working capital management, which is crucial for maintaining liquidity, supporting operations, and driving profitability.