Skechers USA Inc (SKX)
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 | 166.73 | 144.69 | 168.88 | 168.53 | 154.14 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 166.73 | 144.69 | 168.88 | 168.53 | 154.14 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 166.73 + — – —
= 166.73
The cash conversion cycle of Skechers USA Inc has shown variability over the years based on the provided data. As of December 31, 2020, the company's cash conversion cycle was 154.14 days. Over the next four years, the cycle increased to 168.53 days by December 31, 2021, slightly rose to 168.88 days by December 31, 2022, and then decreased to 144.69 days by December 31, 2023. However, there was a subsequent increase to 166.73 days by December 31, 2024.
The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A higher cash conversion cycle implies that the company is taking longer to recover its costs and investments, which may lead to working capital challenges and potentially indicate inefficiencies in managing inventory, accounts receivable, and accounts payable.
Skechers USA Inc should aim to optimize its cash conversion cycle by improving inventory management, speeding up receivables collection, and extending payables payment terms when feasible. Monitoring and managing the cash conversion cycle effectively can enhance working capital management and overall financial health.
Peer comparison
Dec 31, 2024