Ralph Lauren Corp Class A (RL)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	149.71	171.67	172.24	179.96	107.21
Days of sales outstanding (DSO)	days	26.07	27.10	26.23	39.84	18.02
Number of days of payables	days	55.13	59.55	79.08	84.39	35.94
Cash conversion cycle	days	120.66	139.22	119.39	135.42	89.29

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 149.71 + 26.07 – 55.13
= 120.66

The cash conversion cycle of Ralph Lauren Corp Class A has shown some fluctuation over the past five years.

In the most recent fiscal year ending on March 31, 2024, the cash conversion cycle was 120.66 days, indicating that on average, it takes the company approximately 120.66 days to convert its investments in inventory and other resources into cash from sales. This represents a slight improvement compared to the prior fiscal year.

Looking back over the five-year period, we can see that the cash conversion cycle has ranged from a low of 89.29 days in fiscal year 2020 to a high of 139.22 days in fiscal year 2023. This variability suggests that the company may have experienced challenges in managing its working capital efficiently in certain years.

Overall, a lower cash conversion cycle is generally favorable as it indicates that the company is able to generate cash quickly from its operational activities. However, it is important to consider the industry norms and the specific business model of Ralph Lauren Corp Class A when evaluating the significance of these figures in context.