Aramark Holdings (ARMK)

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	7.49	8.14	12.63	13.43	13.10	13.22	12.94	11.82	11.44	13.09	13.64	14.95	13.87	12.80	11.39	9.97	9.86	10.26	9.89	10.11
Days of sales outstanding (DSO)	days	40.94	36.12	46.93	49.55	50.58	49.18	49.70	51.62	53.16	54.00	50.92	53.42	50.47	42.00	36.88	42.37	44.39	40.30	40.97	42.08
Number of days of payables	days	22.33	25.64	22.33	25.06	25.13	31.65	22.82	25.20	22.84	29.15	22.87	24.12	20.92	19.46	16.49	19.59	21.18	24.94	20.62	23.04
Cash conversion cycle	days	26.10	18.62	37.24	37.91	38.56	30.74	39.82	38.24	41.76	37.94	41.69	44.24	43.42	35.34	31.78	32.75	33.06	25.62	30.23	29.16

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.49 + 40.94 – 22.33
= 26.10

The cash conversion cycle of Aramark Holdings has shown fluctuations over the past few periods, indicating variability in the company's efficiency in managing its working capital. The cash conversion cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales, ranged from a low of 18.62 days to a high of 44.24 days over the period analyzed.

The lowest cash conversion cycle of 18.62 days in September 2023 suggests that Aramark was able to efficiently manage its inventory and accounts receivable to quickly convert them into cash. Conversely, the highest cash conversion cycle of 44.24 days in March 2021 indicates a longer time taken by the company to convert its investments into cash inflows, potentially signaling inefficiencies in working capital management.

Overall, Aramark's cash conversion cycle has shown some variability, with fluctuations in efficiency in converting its resources into cash over the periods examined. Further analysis would be needed to understand the specific drivers behind these fluctuations and to identify potential areas for improvement in working capital management.