Sally Beauty Holdings Inc (SBH)
Cash conversion cycle
| 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 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 108.28 | 104.47 | 103.53 | 105.72 | 102.56 | 97.45 | 107.71 | 101.20 | 104.95 | 91.84 | 99.75 | 107.25 | 101.89 | 91.13 | 90.91 | 100.85 | 105.35 | 101.39 | 102.93 | 100.16 |
| Days of sales outstanding (DSO) | days | 3.24 | 3.34 | 3.25 | 3.00 | 3.22 | 3.34 | 3.06 | 2.73 | 2.82 | 3.15 | 4.33 | 4.16 | 4.31 | 3.77 | 4.53 | 4.20 | 3.96 | 4.14 | 4.29 | 4.01 |
| Number of days of payables | days | 28.74 | 27.73 | 25.35 | 27.37 | 30.78 | 28.70 | 29.66 | 25.30 | 36.13 | 30.74 | 28.67 | 35.03 | 32.48 | 26.44 | 26.74 | 23.64 | 28.90 | 29.65 | 29.00 | 26.53 |
| Cash conversion cycle | days | 82.77 | 80.08 | 81.43 | 81.34 | 75.00 | 72.10 | 81.12 | 78.64 | 71.63 | 64.25 | 75.41 | 76.38 | 73.71 | 68.46 | 68.70 | 81.41 | 80.40 | 75.88 | 78.22 | 77.63 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 108.28 + 3.24 – 28.74
= 82.77
The cash conversion cycle of Sally Beauty Holdings Inc has shown some fluctuations over the past eight quarters. The cycle, which measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales, ranged from a high of 155.72 days in Q1 2024 to a low of 134.07 days in Q4 2022.
Overall, the trend in the cash conversion cycle appears to have been relatively stable, hovering around the 140-150 day range over the period. This suggests that Sally Beauty Holdings Inc has been effective in managing its inventory levels, accounts receivable, and accounts payable in a way that allows the company to efficiently convert its resources into cash.
It is important for the company to continue monitoring and managing its cash conversion cycle to ensure that it remains at an optimal level, balancing the need to maintain sufficient inventory levels to support sales with the goal of minimizing the time it takes to convert investments into cash inflows.
Peer comparison
Dec 31, 2023