FedEx Corporation (FDX)
Cash conversion cycle
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.40 | 3.26 | 3.11 | 3.17 | 3.25 |
| Days of sales outstanding (DSO) | days | 47.19 | 41.98 | 41.25 | 46.30 | 52.47 |
| Number of days of payables | days | 20.84 | 16.93 | 19.79 | 20.06 | 21.24 |
| Cash conversion cycle | days | 29.75 | 28.31 | 24.57 | 29.42 | 34.47 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.40 + 47.19 – 20.84
= 29.75
The data indicates a downward trend in FedEx Corporation’s cash conversion cycle (CCC) from May 31, 2021, through May 31, 2023, followed by a slight increase in subsequent periods. Specifically, the CCC decreased from 34.47 days in 2021 to 29.42 days in 2022, representing an improvement in the company's operational efficiency in converting its investments in inventory and receivables into cash. This downward movement continued into 2023, with a further reduction to 24.57 days, suggesting that FedEx was able to accelerate its collection and inventory turnover processes during this period.
However, in the subsequent year, the CCC rose modestly to 28.31 days in 2024 and further to 29.75 days in 2025. This uptick implies a slight slowdown in the company's receivables collection, inventory management, or both, leading to a marginal elongation of the overall cycle.
Overall, the observed trend demonstrates that FedEx optimized its cash flow cycle significantly over the two-year period from 2021 to 2023, likely reflecting improvements in operational efficiencies or strategic adjustments. The subsequent increase suggests a potential stabilization or a minor reversal in efficiency gains, which warrants ongoing monitoring to determine if this trend persists or if further efficiency improvements are implemented.