Deere & Company (DE)

Cash conversion cycle

Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019
Days of inventory on hand (DOH) days 575.54 662.11 693.49 65.29 69.98
Days of sales outstanding (DSO) days
Number of days of payables days
Cash conversion cycle days 575.54 662.11 693.49 65.29 69.98

October 29, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 575.54 + — – —
= 575.54

The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. For Deere & Co., the CCC has fluctuated over the past five years, indicating varying efficiency in managing its working capital.

In fiscal year 2023, the CCC was 107.28 days, showing a slight improvement from the previous year's 109.36 days. This suggests that Deere & Co. was able to reduce the time it takes to sell inventory and collect cash from customers. This improvement may have been driven by more efficient inventory management and faster cash collection processes.

In fiscal year 2021, the CCC was 97.69 days, representing the most efficient performance in the last five years. This indicates that Deere & Co. was able to more effectively manage its working capital and convert its inventory and other assets into cash at a quicker pace.

On the other hand, in fiscal year 2019, the CCC was significantly higher at 144.28 days, suggesting that Deere & Co. took longer to convert its resources into cash flows. This could indicate challenges in managing working capital, potentially leading to higher carrying costs for inventory and slower cash conversion.

Overall, while Deere & Co. has shown fluctuations in its CCC over the past five years, the company's ability to manage working capital and convert investments into cash has improved in some years while facing challenges in others. Further analysis of the components of the cash conversion cycle, such as inventory turnover and accounts receivable collection efficiency, would provide a more detailed understanding of the company's working capital management.


Peer comparison

Oct 29, 2023

Company name
Symbol
Cash conversion cycle
Deere & Company
DE
575.54
AGCO Corporation
AGCO
107.69
Alamo Group Inc
ALG
160.25
Lindsay Corporation
LNN
172.79