Fastenal Company (FAST)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.30 | 95.32 | 92.94 | 93.08 | 95.35 | 95.49 | 99.36 | 106.57 | 112.57 | 113.29 | 116.52 | 116.67 | 115.89 | 109.70 | 106.52 | 104.64 | 108.23 | 110.04 | 115.56 | 113.48 |
| Days of sales outstanding (DSO) | days | 53.61 | 58.58 | 59.31 | 60.02 | 54.08 | 58.77 | 59.17 | 58.92 | 53.09 | 59.58 | 61.45 | 62.24 | 54.75 | 59.44 | 58.30 | 54.58 | 49.78 | 54.78 | 58.25 | 56.55 |
| Number of days of payables | days | 17.37 | 18.44 | 18.07 | 17.17 | 16.54 | 17.35 | 16.63 | 17.21 | 16.81 | 18.71 | 20.42 | 21.13 | 17.73 | 20.11 | 18.94 | 17.24 | 16.75 | 17.24 | 16.01 | 17.89 |
| Cash conversion cycle | days | 135.54 | 135.46 | 134.18 | 135.93 | 132.90 | 136.90 | 141.90 | 148.28 | 148.86 | 154.16 | 157.56 | 157.78 | 152.90 | 149.03 | 145.89 | 141.98 | 141.26 | 147.57 | 157.81 | 152.14 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.30 + 53.61 – 17.37
= 135.54
The cash conversion cycle of Fastenal Company has shown some fluctuations over the period under review. The company's cash conversion cycle measures the time it takes for Fastenal to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle is generally considered favorable as it indicates that the company is efficiently managing its working capital.
From March 31, 2020, to December 31, 2024, the cash conversion cycle of Fastenal varied within a range of 132.90 days to 157.81 days. Overall, there was a downward trend in the cash conversion cycle from the beginning of the period until September 30, 2023. This trend indicates that Fastenal was improving its efficiency in managing inventory, collecting receivables, and paying suppliers promptly during this period.
However, from September 30, 2023, there was a slight increase in the cash conversion cycle until June 30, 2024, followed by a stabilization in the last two quarters of December 31, 2024. This increase may suggest potential challenges in managing working capital efficiency, potentially due to changes in sales volumes, inventory management, or payment terms with suppliers and customers.
Fastenal should continue to monitor and manage its cash conversion cycle effectively to ensure optimal cash flow management and operating efficiency. Analyzing the components of the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payable outstanding, could provide insights into areas that require improvement to enhance overall working capital management.
Peer comparison
Dec 31, 2024