Apogee Enterprises Inc (APOG)
Cash conversion cycle
| Mar 2, 2024 | Feb 25, 2023 | Feb 26, 2022 | Feb 27, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.07 | 25.90 | 28.26 | 27.83 | 24.28 |
| Days of sales outstanding (DSO) | days | 44.71 | 49.98 | 46.83 | 52.17 | 51.77 |
| Number of days of payables | days | 29.47 | 28.58 | 32.33 | 29.12 | 23.59 |
| Cash conversion cycle | days | 39.31 | 47.30 | 42.76 | 50.88 | 52.47 |
March 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.07 + 44.71 – 29.47
= 39.31
The cash conversion cycle of Apogee Enterprises Inc has shown fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In the most recent fiscal year ending March 2, 2024, the cash conversion cycle decreased to 39.31 days compared to the previous year. This suggests an improvement in the efficiency of managing inventory, collecting receivables, and paying liabilities.
Looking back at the trend, there was a notable increase in the cash conversion cycle from Feb 29, 2020, to Feb 27, 2021, reaching its peak at 52.47 days. This could indicate potential challenges in managing working capital during that period. However, the subsequent years saw a downward trend, with fluctuations in the cycle but generally showing a positive direction.
Overall, the fluctuation in the cash conversion cycle indicates varying efficiency levels in the company's working capital management over the years. The recent decrease could imply improvements in managing cash flows and optimizing operational processes to enhance liquidity and profitability. Monitoring this metric closely will be crucial for assessing the company's financial health and operational efficiency in the future.