Signet Jewelers Ltd (SIG)
Cash conversion cycle
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.75 | 89.66 | 88.06 | 114.43 | 116.37 |
| Days of sales outstanding (DSO) | days | 0.95 | 1.12 | 2.02 | 9.92 | 2.32 |
| Number of days of payables | days | 32.93 | 36.65 | 38.46 | 45.75 | 11.37 |
| Cash conversion cycle | days | 54.77 | 54.13 | 51.62 | 78.60 | 107.31 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 86.75 + 0.95 – 32.93
= 54.77
The cash conversion cycle of Signet Jewelers Ltd has shown a fluctuating trend over the past five years.
In the most recent fiscal year, ending on February 3, 2024, the company's cash conversion cycle was 54.77 days. This indicates that it takes Signet Jewelers approximately 54.77 days to convert its investments in inventory and accounts receivable into cash from sales, reflecting a relatively efficient working capital management.
Comparing this to the previous fiscal years, the company's cash conversion cycle was 54.13 days on January 28, 2023, and 51.62 days on January 29, 2022, showing a consistent performance in terms of working capital efficiency during those periods.
However, in the fiscal years ending on January 30, 2021, and February 1, 2020, Signet Jewelers had higher cash conversion cycles of 78.60 days and 107.31 days, respectively. These longer cycles indicate that the company took more time to convert its investments in inventory and accounts receivable into cash during those periods, potentially signaling challenges in managing working capital efficiently.
Overall, Signet Jewelers Ltd should continue monitoring and aiming to optimize its cash conversion cycle to ensure effective management of its working capital and improve cash flow efficiency.