Core & Main Inc (CNM)
Cash conversion cycle
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 46.90 | 51.08 | 55.79 | 64.25 | 65.04 | 72.70 | 78.27 | 77.43 | |||
| Days of sales outstanding (DSO) | days | 53.64 | 67.63 | 68.58 | 61.12 | 52.93 | 71.87 | 76.20 | 74.25 | |||
| Number of days of payables | days | 30.86 | 40.05 | 37.42 | 36.24 | 29.75 | 44.39 | 55.45 | 62.57 | |||
| Cash conversion cycle | days | 69.68 | 78.67 | 86.95 | 89.13 | 88.22 | 100.18 | 99.02 | 89.10 |
January 28, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 46.90 + 53.64 – 30.86
= 69.68
Core & Main Inc's cash conversion cycle has fluctuated over the past few quarters, ranging from a low of 69.68 days to a high of 100.18 days. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
A shorter cash conversion cycle typically indicates that the company is able to efficiently manage its working capital and turn inventory into sales quickly, ultimately leading to better cash flow.
In the case of Core & Main Inc, the trend in the cash conversion cycle shows some variability, but overall, the company has been able to maintain a range around 80-90 days. This suggests that the company may have a relatively stable inventory turnover rate and collection period for accounts receivable.
However, it is important for Core & Main Inc to monitor and potentially improve its cash conversion cycle over time to ensure optimal efficiency in managing its working capital and cash flow. Identifying ways to streamline operations, manage inventory levels effectively, and speed up collection of receivables could help to reduce the cash conversion cycle and enhance the company's financial performance.