AutoZone Inc (AZO)
Cash conversion cycle
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 250.86 | 264.52 | 245.02 | 278.57 | 286.70 |
| Days of sales outstanding (DSO) | days | 10.88 | 11.34 | 9.44 | 10.54 | 9.51 |
| Number of days of payables | days | 313.41 | 342.56 | 317.58 | 321.10 | 322.93 |
| Cash conversion cycle | days | -51.67 | -66.70 | -63.12 | -32.00 | -26.72 |
August 26, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 250.86 + 10.88 – 313.41
= -51.67
The cash conversion cycle, a measure of how efficiently a company is managing its working capital, for Autozone Inc. has shown fluctuating trends over the past five years. In the most recent period, as of August 26, 2023, the company's cash conversion cycle stood at -51.67 days, reflecting an improvement compared to the prior year. This indicates that Autozone Inc. is taking less time to convert its investments in inventory into cash receipts from its customers and then using that cash to pay its suppliers.
The negative values for the cash conversion cycle signify that Autozone Inc. is able to collect cash from customers before it pays its suppliers, which is generally favorable. However, the extent of improvement or deterioration in the cycle should be assessed in conjunction with other financial metrics to gain a comprehensive understanding of the company's working capital management.
Peer comparison
Aug 26, 2023