Ralph Lauren Corp Class A (RL)

Cash conversion cycle

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	149.71	169.98	193.07	192.42	171.67	201.35	207.34	199.80	172.24	168.01	177.97	162.04	179.96	184.31	172.74	132.04	107.21	135.82	151.80	147.88
Days of sales outstanding (DSO)	days	26.07	23.91	27.41	21.44	27.10	26.25	—	—	26.23	28.02	30.47	27.93	39.84	33.57	29.61	9.90	18.02	21.71	29.45	19.22
Number of days of payables	days	55.13	66.34	74.33	72.64	59.55	76.12	81.88	95.34	79.08	85.50	86.55	74.72	84.39	71.30	55.41	24.63	35.94	40.18	52.49	52.58
Cash conversion cycle	days	120.66	127.55	146.14	141.22	139.22	151.48	125.45	104.46	119.39	110.53	121.89	115.25	135.42	146.58	146.94	117.32	89.29	117.35	128.76	114.52

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 fluctuations over the past few quarters. The trend indicates that the company takes around 120 to 150 days on average to convert its investment in inventory and other resources into cash flow from sales.

The higher the cash conversion cycle, the longer the company is tying up capital in its operations before generating cash inflows from sales. A longer cash conversion cycle may suggest inefficiencies in managing inventory, collecting receivables, or managing payables.

The cash conversion cycle was relatively high in the last quarter, which could indicate challenges in managing working capital efficiently. However, it decreased significantly in the previous quarter, indicating potential improvements in working capital management.

It is crucial for Ralph Lauren Corp Class A to continuously monitor and improve its cash conversion cycle to ensure optimal working capital management, maximize liquidity, and enhance overall operational efficiency.