Darden Restaurants Inc (DRI)

Cash conversion cycle

Feb 28, 2025 Nov 30, 2024 Aug 31, 2024 May 31, 2024 May 26, 2024 Feb 29, 2024 Feb 25, 2024 Nov 30, 2023 Nov 26, 2023 Aug 31, 2023 Aug 27, 2023 May 31, 2023 May 28, 2023 Feb 28, 2023 Feb 26, 2023 Nov 30, 2022 Nov 27, 2022 Aug 31, 2022 Aug 28, 2022 May 31, 2022
Days of inventory on hand (DOH) days 15.10 14.50 13.29 15.02 15.56 16.16 16.85 17.58 17.61 16.25 16.17 16.37 16.69 18.05 18.39 18.09 17.75 16.27 16.65 16.51
Days of sales outstanding (DSO) days — — — — 2.48 — 2.36 — 2.67 — 1.96 — 2.71 — 2.06 — 2.62 — 1.84 —
Number of days of payables days — — — — 21.39 — 22.94 — 24.03 — 23.65 — 24.70 — 25.47 — 26.10 — 24.81 —
Cash conversion cycle days 15.10 14.50 13.29 15.02 -3.36 16.16 -3.73 17.58 -3.75 16.25 -5.51 16.37 -5.30 18.05 -5.03 18.09 -5.73 16.27 -6.32 16.51

February 28, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.10 + — – —
= 15.10

The cash conversion cycle of Darden Restaurants Inc fluctuated over the periods analyzed. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cycle indicates better efficiency in managing working capital.

Looking at the data provided, the cash conversion cycle for Darden Restaurants Inc ranged from -6.32 days to 18.09 days over the observed periods. Negative days imply that the company is able to generate cash from its operations before paying its suppliers, which can be a positive sign of effective cash management.

It is worth noting that the company had several periods with negative cash conversion cycles, indicating a strong ability to collect cash from customers quickly relative to paying suppliers. However, the cycle occasionally increased, suggesting there were periods where the company took longer to convert investments into cash.

Overall, an efficient cash conversion cycle can indicate effective working capital management, potentially leading to improved liquidity and financial performance for Darden Restaurants Inc. However, it is important for the company to monitor and manage its cycle to ensure a balance between maximizing cash inflows and meeting its financial obligations in a timely manner.