Fortune Brands Innovations Inc. (FBIN)
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 | 90.55 | 89.38 | 133.61 | 114.30 | 217.26 |
| Days of sales outstanding (DSO) | days | 40.74 | 42.15 | 40.33 | 67.33 | 74.07 |
| Number of days of payables | days | 48.45 | 51.69 | 55.15 | 72.09 | 155.46 |
| Cash conversion cycle | days | 82.83 | 79.84 | 118.78 | 109.54 | 135.88 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 90.55 + 40.74 – 48.45
= 82.83
The cash conversion cycle of Fortune Brands Innovations Inc. has shown fluctuations over the past five years.
On December 31, 2020, the company's cash conversion cycle was 135.88 days, indicating that it took the company a relatively long time to convert its investments in inventory into cash flow from sales.
By December 31, 2021, the cash conversion cycle decreased to 109.54 days, suggesting an improvement in the company’s efficiency in managing its working capital and converting inventory into cash more quickly.
However, by the end of 2022, the cash conversion cycle had increased to 118.78 days, indicating a slowdown in the company's ability to efficiently convert its resources into cash.
The trend reversed in 2023, with the cash conversion cycle dropping significantly to 79.84 days, the lowest level in the past five years. This likely reflects improved management of inventory and collection of receivables.
Lastly, by December 31, 2024, the cash conversion cycle increased slightly to 82.83 days. Despite the slight uptick, the company still managed to maintain a relatively efficient cash conversion cycle compared to previous years.
Overall, fluctuations in the cash conversion cycle of Fortune Brands Innovations Inc. over the years indicate varying levels of efficiency in managing its working capital and operations.
Peer comparison
Dec 31, 2024