Dollar General Corporation (DG)
Cash conversion cycle
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 70.42 | 71.49 | 66.10 | 63.43 | 67.06 |
| Days of sales outstanding (DSO) | days | 1.07 | 1.32 | 1.04 | 0.99 | 1.01 |
| Number of days of payables | days | 36.12 | 37.57 | 44.02 | 43.69 | 41.02 |
| Cash conversion cycle | days | 35.37 | 35.24 | 23.13 | 20.73 | 27.05 |
February 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.42 + 1.07 – 36.12
= 35.37
The cash conversion cycle of Dollar General Corporation has shown some fluctuations over the past five years. In the most recent fiscal year ending February 2, 2024, the cash conversion cycle increased to 35.37 days from 35.24 days in the previous year, indicating a slight slowdown in the company's ability to convert its investments in inventory and accounts receivable into cash.
Comparing the current cycle to two years prior, there has been a noticeable increase from 23.13 days ending January 28, 2022. This suggests that Dollar General may be taking longer to sell its inventory and collect on its sales, which could potentially impact its liquidity and working capital management.
However, when compared to three years ago, the cash conversion cycle has increased significantly from 20.73 days ending January 29, 2021, indicating a longer operating cycle. It appears that Dollar General may be facing challenges in efficiently managing its cash flow and working capital in recent years.
Moreover, the cycle has also increased from 27.05 days ending January 31, 2020, showing a continuing trend of a lengthier cash conversion cycle, which could potentially strain the company's cash resources and overall financial health.
Overall, Dollar General Corporation's cash conversion cycle has exhibited fluctuations and a general upward trend over the past five years, indicating potential challenges in inventory management and accounts receivable collection that may require closer attention and improvement to enhance the company's overall financial performance.
Peer comparison
Feb 2, 2024