Darden Restaurants Inc (DRI)

Cash conversion cycle

		May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023	May 31, 2022
Days of inventory on hand (DOH)	days	11.81	24.71	12.50	26.98	12.94
Days of sales outstanding (DSO)	days	—	2.53	—	2.80	—
Number of days of payables	days	—	33.98	—	39.95	—
Cash conversion cycle	days	11.81	-6.74	12.50	-10.16	12.94

May 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.81 + — – —
= 11.81

The cash conversion cycle of Darden Restaurants Inc has displayed some fluctuations over the past few years. As of May 31, 2022, the company had a cash conversion cycle of 12.94 days, indicating that it takes approximately 12.94 days to convert its resources such as inventory and accounts payable into cash.

By May 28, 2023, the cash conversion cycle had turned negative at -10.16 days, which suggests that the company was able to convert its resources into cash more quickly than in the previous period. This negative cycle implies that Darden Restaurants Inc is collecting cash from customers and paying suppliers more efficiently.

However, by May 31, 2023, the cash conversion cycle increased to 12.50 days, indicating a reversal back to a longer conversion period. This increase might indicate some challenges in managing the company's working capital efficiently.

As of May 26, 2024, the cash conversion cycle improved again to -6.74 days, implying that the company was able to convert its resources into cash quicker than the period before. This negative cycle indicates efficient management of working capital and cash flow.

Finally, by May 31, 2024, the cash conversion cycle stood at 11.81 days, showing a slight increase from the previous period. Overall, the company's cash conversion cycle has shown variability, with periods of improvement and slight setbacks in its efficiency in converting resources into cash.