Fresh Del Monte Produce Inc (FDP)
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 | 55.40 | 54.76 | 49.95 | 52.95 | 55.15 | 53.82 | 52.97 | 57.78 | 59.53 | 55.04 | 50.47 | 56.45 | 55.73 | 49.96 | 46.37 | 48.23 | 46.90 | 45.98 | 44.79 | 48.96 |
| Days of sales outstanding (DSO) | days | 43.69 | 40.32 | 42.36 | 44.92 | 44.43 | 38.93 | 43.13 | 42.41 | 41.43 | 36.50 | — | — | 40.87 | — | — | — | 37.80 | 35.71 | 37.71 | 39.45 |
| Number of days of payables | days | 23.31 | — | — | — | 25.70 | — | — | — | 28.95 | — | — | — | 32.39 | — | — | — | 27.29 | — | — | — |
| Cash conversion cycle | days | 75.78 | 95.08 | 92.31 | 97.87 | 73.89 | 92.75 | 96.10 | 100.19 | 72.00 | 91.55 | 50.47 | 56.45 | 64.20 | 49.96 | 46.37 | 48.23 | 57.41 | 81.69 | 82.51 | 88.42 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.40 + 43.69 – 23.31
= 75.78
The cash conversion cycle (CCC) of Fresh Del Monte Produce Inc has fluctuated over the past few years. The CCC represents the number of days it takes for the company to convert its investments in raw materials into cash flows from sales. A lower CCC is generally preferred as it indicates that the company is able to generate cash quickly from its operations.
Looking at the data provided:
- The CCC decreased from 88.42 days on March 31, 2020, to 46.37 days on June 30, 2021. This significant improvement may suggest better management of inventory, receivables, and payables.
- However, the CCC increased to 100.19 days on March 31, 2023, before fluctuating between 73.89 and 97.87 days until June 30, 2024.
- The highest CCC was recorded on March 31, 2023, indicating a potential inefficiency in managing working capital during that period.
- Overall, Fresh Del Monte Produce Inc should closely monitor its CCC to ensure efficient operations, maintain liquidity, and optimize cash flows.
In conclusion, analyzing the CCC provides insights into the company's working capital management efficiency over time. By tracking these trends, Fresh Del Monte Produce Inc can make informed decisions to improve its cash conversion cycle and overall financial performance.
Peer comparison
Dec 31, 2024