B&G Foods Inc (BGS)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	115.04	132.61	109.42	108.47	112.55	117.35	122.69	125.48	127.97	142.29	125.16	117.70	119.65	137.72	113.03	104.03	106.34	105.37	82.31	98.55
Days of sales outstanding (DSO)	days	34.25	31.42	28.21	25.22	26.85	28.45	26.71	—	26.66	—	—	—	26.63	—	—	—	—	—	—	—
Number of days of payables	days	25.47	37.71	24.68	25.72	24.48	33.19	24.79	23.51	22.51	40.34	30.76	29.26	25.48	41.64	25.33	26.17	27.31	41.01	28.35	25.34
Cash conversion cycle	days	123.82	126.33	112.95	107.98	114.92	112.60	124.61	101.97	132.11	101.95	94.39	88.45	120.80	96.08	87.70	77.86	79.04	64.36	53.96	73.21

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 115.04 + 34.25 – 25.47
= 123.82

The cash conversion cycle of B&G Foods Inc has shown fluctuation over the years based on the provided data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Looking at the trend from March 2020 to December 2024, we observe that the cash conversion cycle initially decreased from 73.21 days in March 2020 to a low of 53.96 days in June 2020, indicating an improvement in the company's efficiency in managing its working capital. However, the cycle then increased gradually, peaking at 132.11 days in December 2022, before showing slight fluctuations in subsequent periods.

A longer cash conversion cycle may signal inefficiencies in inventory management, accounts receivable collection, or accounts payable turnover. Therefore, B&G Foods Inc should focus on optimizing its inventory levels, streamlining its payment processes, and improving its credit policies to reduce the time it takes to convert investments into cash.

Overall, the trend in B&G Foods Inc's cash conversion cycle suggests the need for continuous monitoring and potential operational adjustments to enhance working capital management and overall financial performance.