Fresh Del Monte Produce Inc (FDP)
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 | 55.15 | 59.53 | 55.73 | 46.90 | 48.15 |
| Days of sales outstanding (DSO) | days | 44.43 | 41.43 | 40.87 | 37.80 | 38.04 |
| Number of days of payables | days | 25.70 | 28.95 | 32.39 | 27.29 | 26.93 |
| Cash conversion cycle | days | 73.89 | 72.00 | 64.20 | 57.41 | 59.27 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.15 + 44.43 – 25.70
= 73.89
The cash conversion cycle of Fresh Del Monte Produce Inc has shown a fluctuating trend over the past five years. In 2023, the cash conversion cycle increased to 73.89 days from 72.00 days in 2022. This indicates that the company took slightly longer to convert its investments in inventory into cash during 2023.
Compared to 2021 and 2020 where the cash conversion cycle was 64.20 days and 57.41 days respectively, the company's efficiency in managing its working capital decreased in 2023. This could suggest that Fresh Del Monte Produce Inc faced challenges in efficiently managing its inventory levels, receivables, and payables during the year.
Although the cash conversion cycle increased in 2023, it was lower than the figure reported in 2019 (59.27 days). It is important for the company to analyze the reasons behind the fluctuations in the cash conversion cycle and take proactive measures to optimize its working capital management in order to improve its overall financial performance.
Peer comparison
Dec 31, 2023