CAVA Group, Inc. (CAVA)
Cash conversion cycle
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.36 | 3.68 | 3.68 | 3.82 | 3.59 | 3.45 | 3.71 | 3.80 | 3.20 | 3.91 | 3.94 |
| Days of sales outstanding (DSO) | days | 5.60 | 4.92 | 5.27 | 6.00 | 5.46 | 5.95 | 6.80 | 6.72 | 6.91 | 5.00 | 5.12 |
| Number of days of payables | days | 12.01 | 12.40 | 12.73 | 10.79 | 11.01 | 10.56 | 8.79 | 10.07 | 13.25 | 10.88 | 10.97 |
| Cash conversion cycle | days | -3.04 | -3.79 | -3.77 | -0.98 | -1.97 | -1.15 | 1.72 | 0.45 | -3.15 | -1.97 | -1.91 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.36 + 5.60 – 12.01
= -3.04
The analysis of CAVA Group, Inc.'s cash conversion cycle (CCC) over the specified periods reveals a pattern of fluctuation between negative and positive values, indicating notable changes in operational efficiency and working capital management practices.
From September 30, 2022, to December 31, 2022, the CCC remained relatively stable around -1.91 to -1.97 days, suggesting that the company was able to convert its investments in inventory and receivables into cash slightly faster than its payables period. This negative CCC indicates effective management whereby the company is receiving cash from sales before making payments to suppliers, thus benefiting from favorable working capital dynamics.
However, starting in March 2023, there was a significant shift as the CCC turned more negative, reaching -3.15 days, implying an improvement in operational efficiency or improved payment terms with suppliers. The trend continued into June 2023, where the CCC turned positive at 0.45 days, signaling that the company was now possibly taking longer to collect receivables or paying suppliers more promptly, which erodes cash flow advantages.
Subsequently, in September 2023, the CCC reverted to positive territory at 1.72 days, suggesting a reversal of prior efficiencies, potentially due to seasonal factors, strategic changes, or supply chain adjustments. Yet, a reversion occurred by December 2023, with the CCC again dipping into negative territory at -1.15 days, indicating a return to receiving cash from sales ahead of payments to suppliers.
In early 2024, the CCC continued to oscillate, with March 2024 showing a comparable negative value of -1.97 days, and June 2024 approaching neutrality at -0.98 days. By September 2024, the CCC was more negative at -3.77 days, and this trend persisted into December 2024 with a similar value of -3.79 days, demonstrating an improving cash cycle position where cash inflows significantly precede outflows.
The pattern in March 2025 slightly moderated, with the CCC at -3.04 days, yet it remained negative, indicating a consistent tendency for the company to generate cash from operations before settling payables. Overall, the trend suggests that while CAVA Group, Inc. experienced periods of operational efficiency that resulted in negative CCCs conducive to working capital advantages, there have been fluctuations possibly driven by strategic, seasonal, or market factors affecting receivables collection, inventory management, or payment policies.
In summary, the company's cash conversion cycle has demonstrated volatility over the analyzed periods but predominantly remained negative, reflecting a generally efficient working capital cycle where cash inflows from sales tend to precede outflows, supporting liquidity. The oscillations between negative and positive values highlight ongoing adjustments in operational and financial strategies aimed at optimizing cash flow dynamics.
Peer comparison
Mar 31, 2025