ConAgra Foods Inc (CAG)

Cash conversion cycle

		May 26, 2024	May 28, 2023	May 29, 2022	May 30, 2021	May 31, 2020
Days of inventory on hand (DOH)	days	61.93	67.26	68.58	63.44	48.62
Days of sales outstanding (DSO)	days	27.37	29.34	28.28	26.88	29.78
Number of days of payables	days	44.41	46.38	65.02	61.44	53.69
Cash conversion cycle	days	44.89	50.22	31.84	28.88	24.71

May 26, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.93 + 27.37 – 44.41
= 44.89

The cash conversion cycle of ConAgra Foods Inc has fluctuated over the past five years, with varying levels of efficiency in managing its working capital. In the most recent fiscal year ending on May 26, 2024, the company's cash conversion cycle stands at 44.89 days, representing a decrease compared to the prior year. This implies that ConAgra Foods took approximately 44.89 days to convert its investments in inventory into cash from sales.

Analyzing the trend over the five-year period, we observe an upward trend from May 31, 2020, to May 28, 2023, where the cash conversion cycle increased from 24.71 days to 50.22 days. This indicates a potential inefficiency in managing inventory, accounts receivable, and accounts payable during this period.

However, in the most recent two fiscal years, the trend reversed, showing improvements in the cash conversion cycle. From May 30, 2021, to May 26, 2024, the company managed to reduce the cash conversion cycle from 28.88 days to 44.89 days, showcasing increased efficiency in managing working capital.

Overall, ConAgra Foods Inc has demonstrated a mixed performance in managing its cash conversion cycle, with recent improvements suggesting enhanced working capital management practices. It is essential for the company to maintain a focus on optimizing its cash conversion cycle to efficiently utilize its resources and enhance profitability.