Victoria's Secret & Co (VSCO)
Cash conversion cycle
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.21 | 106.59 | 92.95 | 92.67 | 93.79 | 76.45 | 66.20 | 63.89 | |||
| Days of sales outstanding (DSO) | days | 9.12 | 8.42 | 8.39 | 7.42 | 8.19 | 10.40 | 8.26 | 8.30 | |||
| Number of days of payables | days | 31.36 | 39.52 | 47.28 | 34.54 | 42.88 | 24.44 | 29.87 | 27.06 | |||
| Cash conversion cycle | days | 37.97 | 75.48 | 54.06 | 65.55 | 59.10 | 62.41 | 44.59 | 45.13 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.21 + 9.12 – 31.36
= 37.97
The cash conversion cycle of Victoria's Secret & Co has shown fluctuations over the past few quarters. The cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales.
In the most recent quarter, the cash conversion cycle significantly improved to 37.97 days, indicating that the company was able to more efficiently manage its inventory, accounts receivable, and accounts payable. This suggests better liquidity management and potentially more effective sales and collection processes.
However, the previous quarter saw a much longer cash conversion cycle of 75.48 days, reflecting potential challenges in managing inventory levels or delays in collecting receivables. This longer cycle could have tied up capital and affected the company's overall working capital efficiency.
Looking further back, the company's cash conversion cycle ranged from 44.59 to 65.55 days, showing some volatility in the efficiency of its working capital management. This variability could be influenced by seasonal factors, changes in customer demand, or shifts in the company's supply chain operations.
Overall, Victoria's Secret & Co should continue to monitor and strive to optimize its cash conversion cycle to ensure it maintains healthy liquidity levels, efficient operations, and effective utilization of its working capital.
Peer comparison
Feb 3, 2024