Signet Jewelers Ltd (SIG)

Cash conversion cycle

Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021
Days of inventory on hand (DOH) days 87.09 86.75 89.66 88.06 114.43
Days of sales outstanding (DSO) days 0.78 0.95 1.12 2.02 9.92
Number of days of payables days 34.48 32.93 36.65 38.46 45.75
Cash conversion cycle days 53.39 54.77 54.13 51.62 78.60

February 1, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.09 + 0.78 – 34.48
= 53.39

Signet Jewelers Ltd's cash conversion cycle has shown a decreasing trend over the past few years. As of February 1, 2025, the company's cash conversion cycle stands at 53.39 days, indicating that it takes approximately 53 days for Signet to convert its investments in inventory into cash receipts from customers. This reflects an improvement in the efficiency of Signet's working capital management compared to the 78.60 days observed on January 30, 2021.

The decreasing trend suggests that Signet has been able to manage its inventory, accounts receivable, and accounts payable more effectively over time. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to generate cash more quickly from its operational activities.

It is important for Signet Jewelers Ltd to continue monitoring and managing its cash conversion cycle to ensure optimal working capital efficiency and liquidity. By maintaining a streamlined and efficient cash conversion cycle, the company can improve its financial health and operational performance.