Brinker International Inc (EAT)

Cash conversion cycle

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	—	8.51	9.05	10.06	10.49
Days of sales outstanding (DSO)	days	—	5.01	5.38	6.80	9.64
Number of days of payables	days	—	15.48	12.63	14.83	16.44
Cash conversion cycle	days	0.00	-1.96	1.80	2.03	3.70

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00

The analysis of Brinker International Inc’s cash conversion cycle (CCC) over the period from June 30, 2021, to June 30, 2025, reveals notable trends in operational efficiency and liquidity management.

In fiscal year 2021, the company’s CCC stood at 3.70 days, indicating a modest period during which cash was tied up in operational processes before being converted back into cash. This relatively positive figure suggests that the company was able to efficiently manage its working capital, with receivables and payables aligned to minimize the cash cycle.

By fiscal year 2022, the CCC decreased to 2.03 days, reflecting an improvement in operational efficiency. The reduction indicates that the company was able to accelerate its cash inflows or delay cash outflows, further optimizing its working capital management. This trend continued into fiscal year 2023, with the CCC declining to 1.80 days, signifying ongoing efficiency gains.

In fiscal year 2024, a significant shift occurred as the CCC turned negative, recorded at -1.96 days. A negative cash conversion cycle suggests that the company is collecting cash from customers before it has to pay its suppliers, enabling a form of free cash flow generation from operational processes. This is often indicative of a highly efficient management of receivables and payables, possibly reflecting favorable payment terms or a shift in operational strategy.

By fiscal year 2025, the CCC reached zero days, implying a balance where the timing of receivables and payables is perfectly aligned, such that the company neither has cash tied up in operations nor benefits from early collections relative to payments.

Overall, the trend demonstrates a gradual movement towards greater operational efficiency, culminating in a negative or neutral cash conversion cycle, which is generally considered advantageous from a liquidity perspective. This progression may enhance the company's cash flow position and reduce reliance on external financing. It also suggests that Brinker International Inc has optimized its working capital management strategies over the analyzed period, resulting in improved liquidity and operational flexibility.