Domino’s Pizza Inc (DPZ)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.00 | 10.31 | 9.34 | 9.65 | 8.72 |
| Days of sales outstanding (DSO) | days | 23.04 | 20.71 | 21.39 | 21.68 | 21.21 |
| Number of days of payables | days | 14.09 | 11.34 | 12.52 | 13.67 | 18.30 |
| Cash conversion cycle | days | 19.95 | 19.69 | 18.21 | 17.66 | 11.63 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.00 + 23.04 – 14.09
= 19.95
Dominos Pizza Inc's cash conversion cycle has shown a consistent upward trend over the past five years, increasing from 11.63 days at the end of 2019 to 19.95 days at the end of 2023. This indicates that the company is taking longer to convert its investments in inventory into cash.
The increase in the cash conversion cycle suggests that Dominos Pizza Inc may be facing challenges in efficiently managing its inventory, accounts receivable, and accounts payable.
Overall, the trend in the cash conversion cycle over the past five years indicates a potential need for the company to streamline its operations, improve inventory management, and enhance its cash flow conversion efficiency.
Peer comparison
Dec 31, 2023