YETI Holdings Inc (YETI)
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 | 172.01 | 157.33 | 143.18 | 151.87 | 162.97 | 216.99 | 261.61 | 238.82 | 195.65 | 174.14 | 154.85 | 138.89 | 110.47 | 109.87 | 116.27 | 167.23 | 154.60 | 183.29 | ||
| Days of sales outstanding (DSO) | days | 21.08 | 29.42 | 30.27 | — | 18.18 | — | — | — | 28.33 | — | — | — | — | — | — | — | — | — | ||
| Number of days of payables | days | 97.12 | 82.54 | 63.79 | 44.51 | 61.79 | 60.64 | 108.96 | 96.80 | 117.39 | 108.74 | 101.77 | 90.65 | 97.47 | 83.12 | 34.72 | 61.46 | 69.79 | 92.47 | ||
| Cash conversion cycle | days | 95.97 | 104.20 | 109.66 | 107.36 | 119.36 | 156.35 | 152.65 | 142.02 | 106.59 | 65.40 | 53.08 | 48.24 | 13.00 | 26.75 | 81.54 | 105.77 | 84.82 | 90.82 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 172.01 + 21.08 – 97.12
= 95.97
The cash conversion cycle of YETI Holdings Inc has fluctuated over the past few years, indicating varying efficiency in managing its cash flow. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash from sales.
In recent quarters, the company's cash conversion cycle has been on an increasing trend, with the cycle peaking at 156.35 days in September 2022. This indicates that it took the company longer to convert its investments into sales and ultimately into cash during that period. Subsequently, there was an improvement in the cash conversion cycle, with the cycle decreasing to 95.97 days by the end of December 2023.
The company managed to reduce the cash conversion cycle by efficiently managing its inventory, accounts receivable, and accounts payable during the latter part of 2023. However, it is worth noting that the cycle is still higher compared to previous periods, suggesting potential room for further improvement in optimizing working capital management.
Overall, a lower cash conversion cycle is generally favorable as it signifies that the company is able to generate cash quickly from its operations. YETI Holdings Inc should continue to focus on enhancing its operational efficiency to maintain a healthy cash conversion cycle and strengthen its overall financial performance.
Peer comparison
Dec 31, 2023