Apogee Enterprises Inc (APOG)
Cash conversion cycle
| Mar 2, 2024 | Nov 25, 2023 | Aug 26, 2023 | May 27, 2023 | Feb 25, 2023 | Nov 26, 2022 | Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 19.46 | 20.30 | 20.52 | 22.26 | 21.74 | 22.96 | 26.49 | 26.84 | 22.14 | 19.79 | 20.88 | 19.80 | 20.79 | 24.40 | 23.21 | 25.48 | 24.28 | 24.90 | 24.19 | 25.03 |
| Days of sales outstanding (DSO) | days | 24.87 | 28.92 | 29.36 | 29.66 | 27.85 | 32.26 | 39.95 | 41.58 | 46.88 | 47.17 | 46.78 | 50.41 | 53.05 | 50.32 | 47.25 | 43.26 | 51.77 | 51.74 | 52.03 | — |
| Number of days of payables | days | 23.82 | 24.01 | 22.08 | 21.45 | 23.99 | 18.72 | 23.47 | 24.22 | 25.33 | 21.25 | 21.58 | 20.77 | 21.75 | 23.05 | 21.88 | 21.11 | 23.59 | 21.87 | 22.29 | 23.63 |
| Cash conversion cycle | days | 20.51 | 25.21 | 27.80 | 30.47 | 25.60 | 36.50 | 42.97 | 44.20 | 43.68 | 45.72 | 46.08 | 49.45 | 52.08 | 51.67 | 48.58 | 47.63 | 52.47 | 54.78 | 53.93 | 1.40 |
March 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.46 + 24.87 – 23.82
= 20.51
The cash conversion cycle of Apogee Enterprises Inc has exhibited fluctuations over the historical period. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
From the data provided, we can observe that the cash conversion cycle has ranged from a low of 1.40 days to a high of 54.78 days. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital and convert its resources into cash quickly.
In analyzing the trend, we observe that the cash conversion cycle has been somewhat volatile over the period, with fluctuations in the range of days. A higher cash conversion cycle may indicate inefficiencies in the management of inventory, receivables, and payables which could lead to liquidity concerns and potential cash flow constraints.
It is essential for Apogee Enterprises Inc to focus on optimizing its cash conversion cycle to improve operational efficiency and free up cash for reinvestment or other strategic initiatives. By streamlining inventory management, improving receivables collection processes, and extending payables efficiently, the company can potentially reduce the cash conversion cycle and enhance its overall liquidity position.