Darden Restaurants Inc (DRI)

Cash conversion cycle

		May 26, 2024	May 28, 2023	May 29, 2022	May 30, 2021	May 31, 2020
Days of inventory on hand (DOH)	days	24.71	26.98	27.35	24.93	22.45
Days of sales outstanding (DSO)	days	2.53	2.80	2.74	3.47	2.35
Number of days of payables	days	33.98	39.95	37.08	39.79	27.06
Cash conversion cycle	days	-6.74	-10.16	-6.99	-11.39	-2.27

May 26, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.71 + 2.53 – 33.98
= -6.74

The cash conversion cycle of Darden Restaurants Inc has shown some fluctuations over the past five years. In May 2024, the company's cash conversion cycle improved to -6.74 days, indicating that Darden is efficiently managing its working capital to generate cash flows. This is a positive sign as a lower number implies that the company is able to quickly convert its inventory into cash.

Comparing this to the previous year, the cash conversion cycle was also favorable at -10.16 days in May 2023. However, in the preceding years, the cycle was slightly longer, with -6.99 days in May 2022 and -11.39 days in May 2021. The cash conversion cycle was even lower in May 2020 at -2.27 days, suggesting efficient management of cash flow and working capital during that period.

Overall, Darden Restaurants Inc has shown stability and efficiency in managing its cash conversion cycle over the past five years, with recent improvements indicating a strong working capital management strategy. This trend bodes well for the company's financial health and operational effectiveness.