Fresh Del Monte Produce Inc (FDP)
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 | 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 | 48.15 | 46.69 | 45.89 | 49.18 |
| Days of sales outstanding (DSO) | days | 44.43 | 38.93 | 43.13 | 42.41 | 41.43 | 36.50 | — | — | 40.87 | — | — | — | 37.80 | 35.71 | 37.71 | 39.45 | 38.04 | 36.12 | 40.17 | 41.73 |
| Number of days of payables | days | 25.70 | — | — | — | 28.95 | — | — | — | 32.39 | — | — | — | 27.29 | — | — | — | 26.93 | — | — | — |
| Cash conversion cycle | days | 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 | 59.27 | 82.81 | 86.05 | 90.91 |
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 measures the efficiency of Fresh Del Monte Produce Inc in managing its cash flow from operations. It reflects the time it takes for the company to convert its resources into cash flows.
Analyzing the trend of Fresh Del Monte Produce Inc's cash conversion cycle over the periods provided, we observe fluctuations in the efficiency of its cash conversion process.
From Dec 2019 to Sep 2020, the cash conversion cycle increased, indicating a lengthening of the time it takes to convert resources into cash. From Jun 2020 to Mar 2022, there was a general improvement in efficiency, as the cash conversion cycle decreased consistently.
However, starting from Dec 2022, there was an increase in the cash conversion cycle, which continued until Sep 2023, reflecting potential challenges in managing cash flow efficiency.
Overall, Fresh Del Monte Produce Inc should closely monitor its cash conversion cycle and aim to streamline its operating cycle, accounts receivable collection, and inventory management to improve its overall cash flow performance in the future.
Peer comparison
Dec 31, 2023