Signet Jewelers Ltd (SIG)
Cash conversion cycle
| Feb 1, 2025 | Nov 2, 2024 | Aug 3, 2024 | May 4, 2024 | Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 87.09 | 96.59 | 89.00 | 90.04 | 86.77 | 170.71 | 164.85 | 170.20 | 160.32 | 99.68 | 90.94 | 91.94 | 107.13 | 128.95 | 123.85 | 169.20 | 166.27 | 170.44 | 173.13 | 187.73 |
| Days of sales outstanding (DSO) | days | 0.78 | 3.75 | 0.48 | 0.48 | 0.95 | 0.99 | 1.27 | 3.10 | 1.12 | 11.53 | 7.10 | 7.42 | 2.02 | 6.86 | 3.63 | 8.33 | 9.91 | 11.97 | 20.39 | 1.96 |
| Number of days of payables | days | 34.48 | 29.05 | 24.65 | 27.20 | 32.94 | 52.53 | 44.93 | 54.68 | 65.53 | 32.84 | 28.62 | 36.54 | 46.79 | 52.11 | 45.14 | 58.67 | 66.48 | 43.78 | 23.86 | 25.83 |
| Cash conversion cycle | days | 53.39 | 71.29 | 64.83 | 63.32 | 54.79 | 119.17 | 121.19 | 118.62 | 95.91 | 78.38 | 69.42 | 62.83 | 62.36 | 83.70 | 82.34 | 118.86 | 109.70 | 138.63 | 169.66 | 163.86 |
February 1, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.09 + 0.78 – 34.48
= 53.39
The cash conversion cycle of Signet Jewelers Ltd has shown fluctuations over the period analyzed. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From May 2, 2020, to August 1, 2020, the cash conversion cycle increased from 163.86 days to 169.66 days, indicating a period of slower conversion of investments into cash. However, the cycle decreased significantly by October 31, 2020, to 138.63 days, reflecting an improvement in efficiency.
Subsequently, the company continued to show improvements in its cash conversion cycle, reaching a low of 62.36 days by January 29, 2022. This period of reduced cycle length suggests that Signet Jewelers was managing its inventory and accounts receivable more efficiently, resulting in quicker cash generation.
However, from January 28, 2023 to July 29, 2023, there was an increase in the cash conversion cycle to 121.19 days, indicating that the company was taking longer to convert its investments into cash during this period.
By February 1, 2025, the cash conversion cycle had decreased again to 53.39 days. This shorter cycle suggests that Signet Jewelers had improved its operational efficiency, potentially through better inventory management and accelerated cash inflows from sales.
Overall, monitoring the cash conversion cycle of Signet Jewelers is crucial for assessing the company's efficiency in managing its working capital and cash flow generation. The trend of the cycle can provide insights into the company's operational performance and financial health.