Fastenal Company (FAST)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.30 | 95.35 | 112.58 | 115.75 | 108.10 |
| Days of sales outstanding (DSO) | days | 53.60 | 54.08 | 53.10 | 54.74 | 49.80 |
| Number of days of payables | days | 17.37 | 16.54 | 16.81 | 17.71 | 16.73 |
| Cash conversion cycle | days | 135.53 | 132.90 | 148.87 | 152.79 | 141.17 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.30 + 53.60 – 17.37
= 135.53
The cash conversion cycle for Fastenal Company has exhibited fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle stood at 141.17 days, indicating that it took approximately 141 days for Fastenal to convert its investments in inventory and accounts receivable into cash.
By December 31, 2021, the cash conversion cycle had lengthened to 152.79 days, suggesting that the company took longer to convert its operating inputs into cash during that year. This increase could be attributed to factors such as changes in inventory turnover or accounts receivable collection efficiency.
Subsequently, by December 31, 2022, the cash conversion cycle decreased to 148.87 days, indicating some improvement in the company's ability to convert its resources into cash more efficiently compared to the previous year.
By December 31, 2023, the cash conversion cycle further reduced to 132.90 days, reaching its lowest point in the five-year period. This decrease suggests that Fastenal was managing its working capital more effectively, potentially through better inventory management or streamlined accounts receivable processes.
As of December 31, 2024, the cash conversion cycle slightly increased to 135.53 days, but remained relatively lower compared to the earlier years. Overall, the trend in the cash conversion cycle indicates fluctuations in Fastenal's efficiency in managing its working capital and converting assets into cash over the past five years.
Peer comparison
Dec 31, 2024