Victoria's Secret & Co (VSCO)
Cash conversion cycle
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.31 | 65.46 | 58.56 |
| Days of sales outstanding (DSO) | days | 9.12 | 8.19 | 8.75 |
| Number of days of payables | days | 31.41 | 29.93 | 33.20 |
| Cash conversion cycle | days | 38.02 | 43.72 | 34.11 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.31 + 9.12 – 31.41
= 38.02
The cash conversion cycle of Victoria's Secret & Co has exhibited fluctuations over the past three years. In January 2022, the company had a relatively low cash conversion cycle of 34.11 days, indicating efficient management of its operating cycle, from purchasing inventory to receiving payments from customers. However, by January 2023, the cash conversion cycle increased to 43.72 days, suggesting potential delays in converting inventory into cash.
Fortunately, by February 2024, Victoria's Secret & Co managed to reduce its cash conversion cycle to 38.02 days, signaling an improvement in its operating efficiency and ability to generate cash flows. Overall, monitoring the cash conversion cycle is crucial for assessing the company's liquidity and operational effectiveness in converting investments in inventory into cash.
Peer comparison
Feb 3, 2024