Cal-Maine Foods Inc (CALM)
Cash conversion cycle
| Jun 1, 2024 | Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Feb 25, 2023 | Nov 26, 2022 | Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 47.39 | 47.47 | 49.39 | 47.54 | 47.53 | 65.16 | 69.43 | 73.04 | 79.74 | 72.71 | 79.96 | 85.03 | 90.94 | 62.75 | 60.99 | 58.25 | 58.30 | 63.06 | 62.58 | 59.59 |
| Days of sales outstanding (DSO) | days | 25.25 | 37.57 | 27.03 | 19.61 | 21.66 | 29.81 | 43.95 | 37.88 | 44.58 | 42.31 | 38.93 | 35.33 | 34.27 | 32.75 | 29.75 | 21.80 | 26.57 | 31.26 | 35.40 | 22.67 |
| Number of days of payables | days | 13.73 | 16.86 | 16.88 | — | 13.80 | — | — | — | 24.85 | — | — | — | 21.98 | — | — | — | 17.41 | — | — | — |
| Cash conversion cycle | days | 58.91 | 68.18 | 59.55 | 67.15 | 55.38 | 94.97 | 113.38 | 110.91 | 99.47 | 115.02 | 118.89 | 120.37 | 103.22 | 95.50 | 90.74 | 80.05 | 67.46 | 94.32 | 97.98 | 82.26 |
June 1, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.39 + 25.25 – 13.73
= 58.91
The cash conversion cycle of Cal-Maine Foods Inc has shown fluctuation over the past few quarters. It measures the time it takes for the company to convert its investments in inventory into cash inflows from sales.
The cash conversion cycle was 58.91 days as of June 1, 2024, which indicates the company took approximately 59 days to complete a full cycle of converting inventory into cash. This represents an improvement compared to the previous quarter, where the cycle was 68.18 days.
Looking at the trend over the past quarters, we observe some variability in the cash conversion cycle. In some periods, such as November 26, 2022, and February 25, 2023, the cycle was relatively long, at 113.38 days and 94.97 days, respectively. This implies that the company took longer to convert inventory into cash during those periods.
Conversely, there were periods like February 27, 2021, and May 29, 2021, when the cash conversion cycle was relatively shorter, at 90.74 days and 95.50 days, respectively. This suggests that the company managed to more efficiently convert inventory into cash during those quarters.
Overall, monitoring the cash conversion cycle is essential for Cal-Maine Foods Inc as it reflects the company's efficiency in managing inventory, collecting receivables, and paying suppliers. By analyzing these fluctuations in the cash conversion cycle, the company can identify inefficiencies and improve its working capital management to optimize cash flow and profitability.