Central Garden & Pet Company (CENT)
Cash conversion cycle
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 90.12 | 92.72 | 107.17 | 110.30 | 97.45 | 102.13 | 114.24 | 120.38 | 109.95 | 102.91 | 102.82 | 98.35 | 81.58 | 81.70 | 100.37 | 99.32 | 84.50 | 85.83 | 109.30 | 119.57 |
| Days of sales outstanding (DSO) | days | 37.54 | 56.21 | 63.80 | 40.83 | 36.71 | 55.06 | 63.25 | 36.35 | 41.19 | 54.60 | 66.42 | 37.00 | 42.57 | 56.65 | 77.56 | 42.48 | 53.05 | 71.75 | 69.15 | 40.73 |
| Number of days of payables | days | 25.28 | 22.57 | 27.82 | 24.68 | 22.19 | 23.41 | 26.62 | 22.82 | 25.28 | 28.11 | 34.41 | 28.50 | 29.23 | 30.91 | 41.61 | 37.49 | 39.45 | 36.02 | 39.49 | 39.68 |
| Cash conversion cycle | days | 102.38 | 126.36 | 143.16 | 126.45 | 111.97 | 133.78 | 150.87 | 133.91 | 125.86 | 129.40 | 134.83 | 106.85 | 94.92 | 107.44 | 136.32 | 104.32 | 98.10 | 121.56 | 138.96 | 120.62 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 90.12 + 37.54 – 25.28
= 102.38
The cash conversion cycle of Central Garden & Pet Company has shown fluctuations over the periods analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From September 2020 to September 2022, the cash conversion cycle fluctuated, ranging from 120.62 days to 134.83 days, indicating variations in the efficiency of the company in managing its working capital during this period.
However, from December 2022 to March 2024, the cash conversion cycle showed an increasing trend, peaking at 150.87 days in March 2023. This trend suggests potential challenges in managing inventory, collecting receivables, and paying off liabilities efficiently during this period.
The company managed to improve its cash conversion cycle in the subsequent quarters, with a significant decrease to 102.38 days in September 2024, showing potential improvements in working capital management and operational efficiency.
In conclusion, Central Garden & Pet Company has experienced fluctuations in its cash conversion cycle, indicating varying efficiency levels in managing working capital and operational processes over the periods analyzed. Continued monitoring and improvement of the cash conversion cycle are essential for the company to optimize its working capital management and enhance overall financial performance.
Peer comparison
Sep 30, 2024