Under Armour Inc A (UAA)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Dec 31, 2021	Mar 31, 2021
Days of inventory on hand (DOH)	days	113.90	133.50	104.95	104.95	141.29
Days of sales outstanding (DSO)	days	48.48	46.98	36.54	36.54	43.02
Number of days of payables	days	57.48	72.80	79.33	79.33	90.83
Cash conversion cycle	days	104.90	107.67	62.17	62.17	93.48

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 113.90 + 48.48 – 57.48
= 104.90

The cash conversion cycle of Under Armour Inc A has fluctuated over the past five years. As of March 31, 2024, the company's cash conversion cycle stood at 104.90 days, showing a slight improvement from the previous year's 107.23 days. This indicates that the company took slightly less time to convert its investments in inventory and accounts receivable into cash during the most recent period.

Comparing the current cash conversion cycle to historical data, it is evident that the cycle has been volatile. The cycle was notably shorter at the end of 2021, at 62.17 days, suggesting a more efficient cash management process at that time. However, in the years prior to 2021, the cash conversion cycle exceeded 90 days, indicating a longer cash conversion process and potentially pointing to issues with inventory control and collection of receivables during those periods.

Overall, analyzing the trend in Under Armour Inc A's cash conversion cycle provides valuable insights into the company's efficiency in managing its working capital and liquidity. The recent improvement in the cycle may suggest enhanced operational effectiveness, but management should continue to monitor and optimize this metric to ensure sustainable cash flow performance.