BJs Restaurants Inc (BJRI)
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 | 5.09 | 4.61 | 5.45 | 6.67 | 5.00 |
| Days of sales outstanding (DSO) | days | 5.35 | 8.13 | 9.80 | 11.13 | 6.97 |
| Number of days of payables | days | 23.31 | 23.11 | 22.98 | 23.61 | 10.55 |
| Cash conversion cycle | days | -12.87 | -10.38 | -7.73 | -5.80 | 1.42 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.09 + 5.35 – 23.31
= -12.87
The cash conversion cycle for BJs Restaurants Inc has shown a decreasing trend over the past five years. In particular, from 2019 to 2020, there was a significant improvement in the cash conversion cycle, shifting from a positive 1.42 days to a negative 5.80 days. This indicates that the company was able to convert its investments in raw materials and inventory into cash more efficiently during this period.
Subsequently, the cash conversion cycle continued to improve, reaching -7.73 days in 2021 and further decreasing to -10.38 days in 2022. By the end of 2023, the cash conversion cycle stood at -12.87 days, demonstrating the company's ability to manage its cash flow effectively.
A negative cash conversion cycle indicates that BJs Restaurants Inc is able to collect cash from its customers before paying its suppliers, which can be beneficial for the company's liquidity and working capital management. Overall, the decreasing trend in the cash conversion cycle over the years reflects an efficient operating cycle for the company.
Peer comparison
Dec 31, 2023