VF Corporation (VFC)

Cash conversion cycle

		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	Mar 31, 2020
Days of inventory on hand (DOH)	days	65.81	75.05	74.66	60.42	77.42	86.81	95.50	97.57	104.71	112.03	101.90	49.99	46.09	54.38	46.73	43.81	59.20	76.12	69.31	57.00
Days of sales outstanding (DSO)	days	50.06	67.43	38.27	45.66	45.43	61.90	39.52	51.46	49.51	57.49	38.77	45.81	48.09	60.75	40.82	52.06	58.83	65.58	35.87	45.52
Number of days of payables	days	36.96	40.88	40.96	28.06	35.14	34.71	43.94	39.85	36.62	41.65	44.51	19.84	20.04	19.84	20.54	19.11	22.69	23.88	17.24	17.93
Cash conversion cycle	days	78.91	101.60	71.97	78.02	87.71	114.01	91.08	109.19	117.60	127.86	96.16	75.96	74.13	95.28	67.01	76.76	95.34	117.82	87.94	84.59

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.81 + 50.06 – 36.96
= 78.91

The cash conversion cycle for VF Corporation has fluctuated over the periods provided in the data. The cash conversion cycle is a metric that reflects how long a company typically takes to convert its investments in inventory into cash flows from sales.

From the data:

- The cash conversion cycle started at 84.59 days on March 31, 2020, and increased to 127.86 days by September 30, 2022, indicating a potential inefficiency in managing working capital.
- There was a notable decrease in the cash conversion cycle to 71.97 days on June 30, 2024, showing an improvement in managing working capital efficiency.
- The cycle saw some fluctuations throughout the periods, with some quarters showing longer cash conversion cycles, such as September 30, 2020, and September 30, 2022, which were 117.82 days and 127.86 days, respectively.
- The trend generally improved towards the end of the data period, with a decline in the cash conversion cycle to 78.91 days by December 31, 2024.

Overall, a lower cash conversion cycle is generally preferred as it indicates that the company is managing its working capital more efficiently, translating investments in inventory into cash more quickly. VF Corporation should continue to monitor and manage its cash conversion cycle to ensure optimal working capital management and operational efficiency.