Tapestry Inc (TPR)
Cash conversion cycle
| Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 168.97 | 164.50 | 161.46 | 180.15 | 172.47 | 170.06 | 175.79 | 200.61 | 178.40 | 168.50 | 143.57 | 172.19 | 161.14 | 178.62 | 151.13 | 182.69 | 156.19 | 154.06 | 137.97 | 163.02 |
| Days of sales outstanding (DSO) | days | 12.49 | 15.07 | 13.33 | 14.50 | 11.59 | — | 13.99 | — | 13.78 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 92.64 | 74.47 | 90.60 | 73.88 | 78.20 | 60.26 | 78.67 | 89.92 | 93.43 | 88.38 | 89.63 | 87.12 | 97.63 | 104.45 | 92.39 | 66.66 | 27.72 | 36.14 | 46.54 | 47.10 |
| Cash conversion cycle | days | 88.82 | 105.10 | 84.18 | 120.77 | 105.86 | 109.80 | 111.11 | 110.69 | 98.74 | 80.12 | 53.95 | 85.07 | 63.51 | 74.17 | 58.74 | 116.03 | 128.46 | 117.92 | 91.43 | 115.93 |
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 fluctuated over the past several quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. A shorter cash conversion cycle is generally considered favorable as it indicates efficient management of working capital.
Tapestry's cash conversion cycle has shown variability, ranging from a low of 53.95 days in March 2022 to a high of 128.46 days in March 2020. A longer cash conversion cycle may indicate inefficiencies in inventory management, collection of receivables, or payment of payables.
In the most recent quarter, as of June 30, 2024, the cash conversion cycle stands at 88.82 days. This figure is lower than the cycle observed in the previous quarter but still higher than ideal, signaling that Tapestry may be taking longer to convert its resources into cash.
Overall, Tapestry Inc should focus on optimizing its cash conversion cycle by streamlining its inventory management, enhancing its accounts receivable collection process, and effectively managing its payables to improve its working capital efficiency and cash flow generation.
Peer comparison
Jun 30, 2024