PVH Corp (PVH)

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	134.44	135.99	166.04	159.78	168.65	174.17	162.43	131.26	128.49	133.19	136.16	150.11	154.13	150.61	159.42	137.70	130.45	145.15	153.62	133.87
Days of sales outstanding (DSO)	days	31.41	41.40	35.53	36.72	37.36	39.88	32.57	32.98	29.71	37.55	34.97	39.56	32.83	38.16	25.59	22.38	27.31	36.26	29.30	32.05
Number of days of payables	days	101.65	92.00	114.93	98.85	124.19	125.70	130.63	100.33	116.32	101.50	102.46	105.92	122.28	115.17	101.76	69.14	71.28	64.07	76.74	57.95
Cash conversion cycle	days	64.21	85.40	86.63	97.64	81.82	88.36	64.38	63.91	41.88	69.24	68.68	83.75	64.69	73.61	83.25	90.94	86.49	117.33	106.18	107.97

February 4, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 134.44 + 31.41 – 101.65
= 64.21

PVH Corp's cash conversion cycle has fluctuated over the periods indicated in the table provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales.

A shorter cash conversion cycle is generally considered favorable as it indicates that the company is able to efficiently manage its working capital and generate cash quickly. Conversely, a longer cash conversion cycle may suggest inefficiencies in managing inventory, collecting receivables, or paying suppliers.

Analyzing the data, PVH Corp had a peak cash conversion cycle of 117.33 days on Nov 3, 2019, which decreased to a low of 41.88 days on Jan 30, 2022. This significant fluctuation indicates potential changes in the company's operational efficiency over time.

Overall, understanding and monitoring the cash conversion cycle is essential for assessing a company's liquidity and operational effectiveness. PVH Corp's management should focus on optimizing inventory management, accounts receivable collection, and accounts payable payment processes to shorten the cash conversion cycle and improve cash flow management.