Skechers USA Inc (SKX)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 75.27 | 94.10 | 91.75 | 80.28 | 80.75 |
| Days of sales outstanding (DSO) | days | 43.02 | 46.01 | 47.33 | 54.73 | 48.98 |
| Number of days of payables | days | 49.74 | 49.56 | 54.66 | 58.75 | 57.73 |
| Cash conversion cycle | days | 68.55 | 90.56 | 84.43 | 76.26 | 72.01 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 75.27 + 43.02 – 49.74
= 68.55
The cash conversion cycle of Skechers U S A, Inc. has shown fluctuations over the past five years. In 2023, the cash conversion cycle decreased to 92.08 days from 125.76 days in 2022, indicating an improvement in the efficiency of its working capital management. This could be attributed to quicker inventory turnover and collection of receivables.
Compared to 2021, where the cash conversion cycle was 115.33 days, the company has become more efficient in converting its investments in inventory and receivables into cash. This improvement can be positive for the company's liquidity and overall financial health.
In 2020 and 2019, Skechers U S A, Inc. had cash conversion cycles of 96.04 days and 89.69 days, respectively. The longer cash conversion cycle in 2022 and 2021 suggests that the company took longer to convert its investments in inventory and receivables into cash during those years.
Overall, a decreasing trend in the cash conversion cycle indicates that Skechers U S A, Inc. has been managing its working capital more effectively, which is a positive sign for its operational efficiency and financial performance.
Peer comparison
Dec 31, 2023