Under Armour Inc A (UAA)

Cash conversion cycle

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 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	113.90	128.71	130.50	148.54	132.98	138.23	127.64	119.62	104.95	110.04	116.18	127.22	141.29	163.17	185.60	130.20	116.45	118.10	124.12	112.06
Days of sales outstanding (DSO)	days	48.48	43.76	50.12	43.24	46.98	42.38	48.02	43.84	36.54	48.32	42.84	52.93	43.02	65.27	46.02	48.87	49.11	59.03	51.31	52.07
Number of days of payables	days	57.48	81.54	61.87	80.34	72.73	83.85	88.29	83.87	79.33	70.00	80.90	73.31	90.83	99.32	102.87	57.80	80.68	63.01	78.07	48.32
Cash conversion cycle	days	104.90	90.93	118.75	111.44	107.23	96.76	87.37	79.58	62.17	88.36	78.12	106.84	93.48	129.12	128.75	121.26	84.88	114.12	97.37	115.82

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 varied over the periods indicated in the table. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash received from sales.

Looking at the data, we can see fluctuations in the cash conversion cycle, indicating changes in the efficiency of Under Armour's working capital management. A shorter cash conversion cycle is generally preferred as it signifies faster turnover of resources and potentially better liquidity.

From the data provided, there is evidence of some longer cash conversion cycles, particularly in the periods marked by 2020 and 2021. These longer cycles may indicate slower inventory turnover or delays in collecting receivables, which can tie up cash and impact overall liquidity.

Conversely, there are periods where the cash conversion cycle appears to be shorter, such as in the earlier part of 2022. This suggests potential improvements in managing working capital, leading to quicker conversion of investments into cash.

Overall, continuous monitoring and analysis of the cash conversion cycle is crucial for identifying operational inefficiencies and optimizing the management of working capital to support financial health and growth.