Urban Outfitters Inc (URBN)

Cash conversion cycle

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Days of inventory on hand (DOH)	days	58.62	77.60	63.28	63.83	63.79	81.76	78.50	72.84	68.07	79.25	63.11	66.13	55.28	68.81	49.10	45.44	54.77	72.91	61.06	56.88
Days of sales outstanding (DSO)	days	4.76	5.60	5.85	7.95	5.36	6.27	7.56	7.58	5.12	9.69	8.32	8.22	9.56	9.09	6.27	5.55	8.12	9.26	8.85	8.16
Number of days of payables	days	26.99	34.35	29.18	28.50	27.97	35.90	39.14	34.30	36.35	39.87	31.38	34.87	33.68	49.20	28.93	14.17	22.45	31.95	25.25	24.27
Cash conversion cycle	days	36.39	48.86	39.94	43.28	41.18	52.12	46.92	46.12	36.83	49.07	40.05	39.48	31.16	28.70	26.44	36.81	40.44	50.23	44.66	40.76

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 of Urban Outfitters Inc has exhibited fluctuations over the past few quarters. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash from sales to customers.

In the latest quarter ending January 31, 2024, the cash conversion cycle stood at 36.39 days, showing an improvement compared to the previous quarter where it was 48.86 days. This suggests that the company was more efficient in managing its inventory, turning it into sales, and ultimately converting those sales into cash during this period.

Looking back at the historical data, there have been some periods where the cash conversion cycle was longer, such as in October 2022 and October 2019, indicating potential challenges in managing working capital. On the other hand, in April 2021 and July 2020, the company managed to shorten the cycle significantly, which could be attributed to effective inventory management and collection of receivables.

Overall, a lower cash conversion cycle indicates better efficiency in managing working capital and liquidity. Urban Outfitters Inc should continue to monitor and optimize its cash conversion cycle to ensure healthy cash flows and effective operations.