Williams-Sonoma Inc (WSM)
Cash conversion cycle
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 218.63 | 243.59 | 208.79 | 212.86 | 240.07 |
| Days of sales outstanding (DSO) | days | 5.79 | 4.87 | 5.83 | 7.73 | 6.91 |
| Number of days of payables | days | 106.63 | 85.03 | 102.61 | 114.86 | 113.70 |
| Cash conversion cycle | days | 117.79 | 163.42 | 112.01 | 105.73 | 133.28 |
January 28, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 218.63 + 5.79 – 106.63
= 117.79
The cash conversion cycle of Williams-Sonoma Inc has experienced fluctuations over the past five years. In the most recent fiscal year ending on January 28, 2024, the company's cash conversion cycle was 117.79 days, representing an improvement compared to the previous year's cycle of 163.42 days.
Analyzing further, we observe that the cash conversion cycle was relatively high in the fiscal year ending January 29, 2023, at 163.42 days, indicating that the company took longer to convert its inputs into cash during that period. The cycle decreased significantly in the fiscal year ending January 30, 2022, to 112.01 days, showing a more efficient management of cash flows.
In the preceding fiscal year ending January 31, 2021, Williams-Sonoma Inc further reduced its cash conversion cycle to 105.73 days, reflecting an even stronger position in managing its working capital and cash flow operations. However, there was a slight increase in the cash conversion cycle in the fiscal year ending February 2, 2020, where it stood at 133.28 days.
Overall, the trend indicates that the company has made progress in managing its cash conversion cycle efficiently, with fluctuations possibly influenced by various factors such as inventory management, accounts receivable, and accounts payable practices. It is important for Williams-Sonoma Inc to continue monitoring and optimizing its cash conversion cycle to ensure effective working capital management and sustained financial health.