The Chefs Warehouse Inc (CHEF)
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 | 30.91 | 35.36 | 30.04 | 24.18 | 37.71 |
| Days of sales outstanding (DSO) | days | 35.96 | 37.14 | 36.44 | 32.26 | 40.59 |
| Number of days of payables | days | 21.79 | 23.51 | 24.59 | 16.85 | 28.61 |
| Cash conversion cycle | days | 45.08 | 48.99 | 41.89 | 39.58 | 49.70 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.91 + 35.96 – 21.79
= 45.08
The cash conversion cycle for The Chefs Warehouse Inc has exhibited some fluctuations over the past five years.
In 2023, the company's cash conversion cycle improved to 45.08 days compared to 48.99 days in 2022. This indicates that the company was able to manage its cash flows more efficiently in 2023 by reducing the time it takes to convert its resources into cash.
Looking back further, in 2021, the cash conversion cycle was 41.89 days, showing a slight increase from the previous year. In 2020, there was a notable improvement with the cycle standing at 39.58 days, reflecting a more efficient utilization of cash resources. However, in 2019, the cash conversion cycle increased to 49.70 days, suggesting a longer period for the company to convert its investments into cash.
Overall, a decreasing trend in the cash conversion cycle indicates that the company has been improving its liquidity management and operational efficiency. However, fluctuations in the cycle over the years may point towards varying working capital management practices or changes in the company's operating environment.
Peer comparison
Dec 31, 2023