Wolverine World Wide Inc (WWW)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 56.37 | 80.15 | 87.59 | 99.11 | 117.36 | 179.44 | 134.28 | 100.46 | 60.33 | 64.83 | 55.25 | 59.35 | 46.11 | 63.32 | 73.26 | 70.88 | 59.37 | 75.99 | 74.28 | 68.72 |
| Days of sales outstanding (DSO) | days | 38.65 | 43.40 | 35.90 | — | 33.93 | 60.39 | 58.80 | 53.57 | 48.31 | 57.73 | 63.29 | 63.46 | 54.71 | 64.41 | 48.96 | 53.93 | 53.17 | 58.14 | 59.53 | 61.49 |
| Number of days of payables | days | 31.08 | 28.03 | 34.09 | 30.98 | 42.87 | 64.76 | 66.79 | 61.07 | 36.66 | 41.72 | 46.51 | 51.66 | 35.09 | 37.29 | 29.36 | 24.06 | 34.46 | 28.31 | 38.87 | 20.69 |
| Cash conversion cycle | days | 63.94 | 95.51 | 89.40 | 68.13 | 108.43 | 175.07 | 126.28 | 92.96 | 71.98 | 80.85 | 72.04 | 71.15 | 65.73 | 90.44 | 92.86 | 100.75 | 78.08 | 105.82 | 94.95 | 109.51 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.37 + 38.65 – 31.08
= 63.94
The cash conversion cycle of Wolverine World Wide Inc has shown some fluctuation over the past years. The cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates better liquidity and efficiency in managing the company's working capital.
Based on the data provided, Wolverine World Wide Inc's cash conversion cycle ranged from a low of 63.94 days to a high of 175.07 days over the past few years. A longer cash conversion cycle can indicate delays in receiving payments from customers, inefficient inventory management, or challenges in converting assets into cash.
In analyzing the trend, we see that there was a significant increase in the cash conversion cycle in the third quarter of 2022, reaching 175.07 days, which could be a cause for concern as it may indicate challenges in managing working capital efficiently during that period. The company managed to reduce the cycle in subsequent quarters, suggesting efforts to streamline operations and improve liquidity.
It is important for Wolverine World Wide Inc to continually monitor and analyze its cash conversion cycle to ensure effective working capital management, optimize cash flow, and improve overall financial performance. By identifying and addressing factors contributing to a longer cash conversion cycle, the company can enhance its operational efficiency and financial health in the long run.
Peer comparison
Dec 31, 2023