Steven Madden Ltd (SHOO)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 69.86 | 72.73 | 66.89 | 84.79 | 50.21 |
| Days of sales outstanding (DSO) | days | — | — | 42.70 | 71.39 | 76.74 |
| Number of days of payables | days | 56.10 | 51.18 | 38.17 | 45.44 | 36.59 |
| Cash conversion cycle | days | 13.76 | 21.55 | 71.42 | 110.74 | 90.36 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.86 + — – 56.10
= 13.76
The cash conversion cycle of Steven Madden Ltd has exhibited fluctuations over the years. As of December 31, 2020, the cash conversion cycle stood at 90.36 days, indicating that it took the company approximately 90 days to convert its investments in inventory and other resources into cash flows from sales. By December 31, 2021, the cash conversion cycle increased to 110.74 days, suggesting a delay in the conversion process.
However, there was a significant improvement in the cash conversion cycle by December 31, 2022, as it decreased to 71.42 days, indicating a more efficient use of working capital. The trend continued positively in the subsequent years, with the cash conversion cycle further decreasing to 21.55 days by December 31, 2023, and to 13.76 days by December 31, 2024.
The declining trend in the cash conversion cycle over the years suggests that Steven Madden Ltd has been effective in managing its working capital and improving its operational efficiency. A lower cash conversion cycle reflects a quicker conversion of resources into cash inflows, potentially enhancing liquidity and profitability. It indicates that the company may have streamlined its inventory management, accounts receivables collection, and accounts payables payment processes, leading to improved financial performance.
Peer comparison
Dec 31, 2024