VF Corporation (VFC)

Cash conversion cycle

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 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
Days of inventory on hand (DOH) days 132.81 139.43 158.83 155.68 128.48 151.55 166.50 186.38 151.72 172.23 182.74 156.13 96.13 89.25 106.57 92.16 88.67 95.31 122.48 111.53
Days of sales outstanding (DSO) days 50.03 49.64 66.41 37.59 44.54 44.33 60.66 38.75 50.61 48.83 56.79 38.30 45.24 47.07 59.59 40.13 51.28 58.82 63.93 34.28
Number of days of payables days 64.45 78.30 86.52 85.40 59.44 68.77 66.63 85.75 61.96 60.22 67.94 68.20 38.15 38.81 38.88 40.50 38.68 36.52 38.42 27.74
Cash conversion cycle days 118.38 110.76 138.72 107.87 113.59 127.11 160.53 139.37 140.38 160.84 171.59 126.23 103.23 97.51 127.29 91.79 101.27 117.61 147.99 118.07

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.81 + 50.03 – 64.45
= 118.38

The cash conversion cycle of VF Corporation has fluctuated over the past few years, indicating variability in its management of cash, inventory, and receivables. The cash conversion cycle measures the time taken by a company to convert its investments in inventory and other resources into cash flows from sales.

From June 2020 to September 2021, VF Corporation's cash conversion cycle varied between 91.79 days and 171.59 days, reflecting changes in its operational efficiency. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital by quickly selling inventory and collecting receivables, thus converting them into cash.

In the more recent periods, the cash conversion cycle decreased to 108.00 days as of June 2024, reflecting improvements in inventory management and collection of receivables. However, in September 2024, the cycle increased to 138.84 days, suggesting potential challenges in managing working capital efficiently.

Overall, VF Corporation should continue monitoring its cash conversion cycle closely to ensure optimal management of its working capital and improve its operational efficiency. Efforts to streamline inventory management, enhance receivables collection processes, and negotiate favorable payment terms with suppliers could potentially reduce the cash conversion cycle further, leading to improved liquidity and financial performance.