Urban Outfitters Inc (URBN)

Cash conversion cycle

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Days of inventory on hand (DOH)	days	58.62	63.79	68.07	55.28	54.77
Days of sales outstanding (DSO)	days	4.76	5.36	5.12	9.56	8.12
Number of days of payables	days	26.99	27.97	36.35	33.68	22.45
Cash conversion cycle	days	36.39	41.18	36.83	31.16	40.44

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.62 + 4.76 – 26.99
= 36.39

The cash conversion cycle for Urban Outfitters Inc has fluctuated over the past five years, ranging from 31.16 days in the fiscal year ending January 31, 2021, to 41.18 days in the fiscal year ending January 31, 2023. This metric measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle indicates a more efficient management of working capital, as the company can quickly recover its investment in inventory and generate cash from sales. The improvement in the cash conversion cycle from 2020 to 2021 suggests that the company was able to effectively manage its inventory and accounts receivable, leading to quicker cash generation. However, the increase in the cash conversion cycle from 2021 to 2023 may indicate potential challenges in managing working capital efficiently during that period. Overall, a comprehensive analysis of the trend in Urban Outfitters Inc's cash conversion cycle can provide insights into its operational efficiency and liquidity management over the years.