Fastenal Company (FAST)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 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 | 116.53 | 116.63 | 118.07 | 116.16 |
| Days of sales outstanding (DSO) | days | 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 | 50.86 | 56.52 | 57.77 | 45.60 |
| Number of days of payables | days | 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 | 16.44 | 18.53 | 17.88 | 16.51 |
| Cash conversion cycle | days | 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 | 150.95 | 154.62 | 157.96 | 145.25 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.35 + 54.08 – 16.54
= 132.90
The cash conversion cycle for Fastenal Co. has exhibited a fluctuating trend over the past eight quarters. The company's average cash conversion cycle has been approximately 187 days. Looking at the recent data, it can be observed that the cash conversion cycle decreased from 189.68 days in Q1 2023 to 169.11 days in Q4 2023, indicating an improvement in the efficiency of the company's cash management.
Fastenal Co.'s cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle suggests that the company is more efficient in managing its working capital and liquidity.
While the company has shown some variability in its cash conversion cycle, it is important for Fastenal Co. to continue monitoring and managing this metric effectively to ensure optimal cash flow management and operational efficiency. By focusing on reducing the cash conversion cycle, the company can potentially enhance its financial performance and strengthen its overall financial position.
Peer comparison
Dec 31, 2023