B&G Foods Inc (BGS)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 112.55 | 127.97 | 119.65 | 106.34 | 118.13 |
| Days of sales outstanding (DSO) | days | 26.84 | 26.66 | 26.63 | 27.65 | 33.72 |
| Number of days of payables | days | 24.49 | 22.51 | 25.48 | 27.31 | 28.75 |
| Cash conversion cycle | days | 114.90 | 132.11 | 120.81 | 106.69 | 123.09 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 112.55 + 26.84 – 24.49
= 114.90
The cash conversion cycle of B&G Foods Inc has fluctuated over the past five years, with a high of 132.11 days in 2022 and a low of 106.69 days in 2020. The cash conversion cycle measures the time it takes for a company to convert its investments in raw materials into cash received from sales.
In 2023, the cash conversion cycle improved to 114.90 days, indicating that the company more efficiently managed its working capital and converted inventory and receivables into cash. This improvement may suggest better inventory management, faster collection of receivables, or more efficient payment of payables.
Despite the fluctuations in the cash conversion cycle over the years, B&G Foods Inc should strive to further reduce this cycle to increase its liquidity and overall financial health. A shorter cash conversion cycle generally signifies a more efficient operation and better cash flow management, which can lead to improved profitability and sustainable growth in the long term.
Peer comparison
Dec 31, 2023