Campbell Soup Company Common Stock (CPB)

Cash conversion cycle

		Jul 28, 2024	Jul 30, 2023	Jul 31, 2022	Aug 1, 2021	Aug 2, 2020
Days of inventory on hand (DOH)	days	59.11	59.26	62.08	49.61	55.85
Days of sales outstanding (DSO)	days	23.86	20.64	23.06	25.62	24.15
Number of days of payables	days	55.91	59.95	66.46	56.90	67.27
Cash conversion cycle	days	27.06	19.95	18.68	18.34	12.73

July 28, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.11 + 23.86 – 55.91
= 27.06

The cash conversion cycle of Campbell Soup Company Common Stock has shown a fluctuating trend over the five-year period. The cycle increased from 12.73 days in 2020 to 18.34 days in 2021, indicating a lengthening of the time it takes for the company to convert its investments in raw materials into cash from sales. However, in 2022 and 2023, there was a slight improvement in the cycle, signaling more efficient management of working capital.

In 2024, the cash conversion cycle rose significantly to 27.06 days, reflecting a potential challenge in managing the company’s cash flow and working capital effectively. A longer cash conversion cycle may suggest that Campbell Soup Company is taking more time to convert its inventory to sales and then collect cash from customers.

Overall, a close monitoring of the cash conversion cycle is warranted to ensure optimal management of working capital and liquidity in the company's operations.