Tapestry Inc (TPR)
Cash conversion cycle
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 168.97 | 172.47 | 178.40 | 161.14 | 156.19 |
| Days of sales outstanding (DSO) | days | 12.49 | 11.59 | 13.78 | 12.72 | 14.22 |
| Number of days of payables | days | 92.64 | 78.20 | 93.43 | 97.63 | 27.72 |
| Cash conversion cycle | days | 88.82 | 105.86 | 98.74 | 76.23 | 142.68 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 168.97 + 12.49 – 92.64
= 88.82
The cash conversion cycle of Tapestry Inc has shown fluctuations over the past five years. In the most recent period ending June 30, 2024, the cash conversion cycle improved to 88.82 days, indicating that the company took fewer days to convert its investments in inventory and other resources into cash. This improvement suggests more efficient operations in managing its working capital.
Comparing this to the previous years, we observe that the cash conversion cycle was relatively high in June 2020 at 142.68 days, indicating a longer time taken to convert investments into cash. However, significant progress has been made since then, with the cash conversion cycle decreasing in subsequent years.
In general, a lower cash conversion cycle implies that Tapestry Inc is managing its working capital effectively, which can lead to improved liquidity and cash flow. It signals that the company is efficient in its inventory management, collection of receivables, and payment of payables. This trend reflects positively on the company's operational efficiency and financial health in recent years.
Peer comparison
Jun 30, 2024