Skechers USA Inc (SKX)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.19 | 69.47 | 75.35 | 77.04 | 95.10 | 96.31 | 89.09 | 85.97 | 92.83 | 81.77 | 72.93 | 84.26 | 81.45 | 85.07 | 82.99 | 73.71 | 81.66 | 71.61 | 71.26 | 63.07 |
| Days of sales outstanding (DSO) | days | 43.03 | 45.81 | 47.37 | 54.29 | 45.92 | 51.23 | 51.68 | 59.38 | 47.39 | 51.58 | 54.14 | 66.63 | 54.92 | 62.38 | 42.95 | 60.67 | 48.98 | 52.14 | 52.36 | 60.46 |
| Number of days of payables | days | 50.35 | 41.26 | 40.68 | 45.75 | 50.08 | 50.12 | 55.39 | 48.17 | 55.30 | 56.24 | 57.38 | 63.78 | 59.61 | 59.94 | 50.15 | 46.71 | 58.38 | 53.20 | 53.31 | 38.84 |
| Cash conversion cycle | days | 68.87 | 74.02 | 82.04 | 85.58 | 90.94 | 97.42 | 85.38 | 97.17 | 84.92 | 77.12 | 69.69 | 87.11 | 76.76 | 87.51 | 75.78 | 87.66 | 72.26 | 70.55 | 70.30 | 84.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 76.19 + 43.03 – 50.35
= 68.87
The cash conversion cycle of Skechers U S A, Inc. has shown some variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 92.08 days, which represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales. This cycle improved compared to the previous quarter's 98.41 days, indicating that the company was able to manage its cash flow more efficiently in Q4 2023.
Looking further back, we observe that the cash conversion cycle was highest in Q3 2022 at 132.87 days and has since fluctuated, with Q2 2023 and Q1 2023 showing elevated levels at 110.78 days and 110.63 days, respectively. The company experienced a notable improvement in its cash conversion cycle from Q3 2022 to Q4 2023, suggesting potential enhancements in inventory management, accounts receivable collection, and accounts payable terms.
It is essential for Skechers U S A, Inc. to continuously monitor and optimize its cash conversion cycle to ensure streamlined operations, effective working capital management, and sustainable growth. By shortening the cash conversion cycle, the company can free up cash resources, reduce reliance on external financing, and improve overall financial performance.
Peer comparison
Dec 31, 2023