Dollar General Corporation (DG)

Cash conversion cycle

		Feb 2, 2024	Nov 3, 2023	Aug 4, 2023	May 5, 2023	Feb 3, 2023	Oct 28, 2022	Jul 29, 2022	Apr 29, 2022	Jan 28, 2022	Oct 29, 2021	Jul 30, 2021	Apr 30, 2021	Jan 29, 2021	Oct 30, 2020	Jul 31, 2020	May 1, 2020	Jan 31, 2020	Nov 1, 2019	Aug 2, 2019	May 3, 2019
Days of inventory on hand (DOH)	days	75.00	78.91	82.08	81.38	71.49	78.78	78.55	70.50	66.10	63.02	63.67	61.83	63.43	63.06	56.91	72.94	89.46	87.96	88.96	62.50
Days of sales outstanding (DSO)	days	1.07	1.86	1.43	—	1.32	1.90	0.97	0.36	1.04	1.30	1.38	0.18	0.98	1.25	0.42	—	1.01	—	—	—
Number of days of payables	days	38.47	39.18	40.12	40.82	37.57	45.50	49.36	45.25	44.02	42.01	40.64	39.94	43.69	47.31	44.07	52.47	54.72	55.64	54.89	37.31
Cash conversion cycle	days	37.60	41.60	43.39	40.57	35.24	35.17	30.16	25.61	23.13	22.30	24.41	22.07	20.73	17.00	13.26	20.48	35.75	32.32	34.07	25.20

February 2, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 75.00 + 1.07 – 38.47
= 37.60

The cash conversion cycle of Dollar General Corporation has shown some fluctuations over the past few reporting periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash from sales.

From the data provided, we can observe that Dollar General Corporation's cash conversion cycle ranged from as low as 13.26 days to as high as 43.39 days. A lower cash conversion cycle is generally considered favorable as it indicates that the company is more efficient in managing its working capital.

The trend in Dollar General's cash conversion cycle indicates that there have been fluctuations but with an overall decreasing trend over the past few reporting periods. The company has made improvements in managing its inventory and collections, leading to a more efficient cash conversion cycle.

It is important for Dollar General Corporation to continue monitoring and managing its cash conversion cycle effectively to ensure optimal working capital management and sustained financial health. By maintaining a low cash conversion cycle, the company can enhance its liquidity position and overall financial performance.