Fortune Brands Innovations Inc. (FBIN)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 89.38 | 133.61 | 114.30 | 217.26 | 70.66 |
| Days of sales outstanding (DSO) | days | 42.15 | 40.33 | 67.33 | 74.07 | 39.56 |
| Number of days of payables | days | 51.69 | 55.15 | 72.09 | 155.46 | 45.23 |
| Cash conversion cycle | days | 79.84 | 118.78 | 109.54 | 135.88 | 64.99 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.38 + 42.15 – 51.69
= 79.84
The cash conversion cycle of Fortune Brands Innovations Inc. has fluctuated over the past five years.
In 2023, the company's cash conversion cycle decreased to 79.84 days from 118.78 days in 2022, which indicates an improvement in the efficiency of its working capital management. This reduction suggests that the company was able to convert its investment in inventory to cash more quickly during the year.
Comparing the data to 2021, the cash conversion cycle increased slightly, from 109.54 days to 118.78 days in 2022. This increase indicates that the company took longer to convert its investments in inventory into revenue or cash during this period.
In 2020, the cash conversion cycle was the highest at 135.88 days, which suggests that the company faced challenges in managing its working capital efficiently that year. However, this improved significantly in 2019, where the cash conversion cycle was 64.99 days, indicating a more optimal working capital management.
Overall, the trend over the past five years shows some variability in Fortune Brands Innovations Inc.'s cash conversion cycle, with improvements in 2023 and 2019, while facing challenges in 2020. Monitoring and managing the cash conversion cycle effectively is crucial for the company to optimize its working capital and cash flow operations.
Peer comparison
Dec 31, 2023