FedEx Corporation (FDX)
Cash conversion cycle
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 3.31 | 3.34 | 3.28 | 3.31 | 3.47 | 3.40 | 3.32 | 3.11 | 3.16 | 3.23 | 3.17 | 3.17 | 3.09 | 3.07 | 3.08 | 3.25 | 3.40 | 3.60 | 3.77 |
| Days of sales outstanding (DSO) | days | — | 42.52 | 44.84 | 42.97 | 43.91 | 41.31 | 44.26 | 42.05 | 41.25 | 42.25 | 45.17 | 42.59 | 46.30 | 46.45 | 49.71 | 46.87 | 52.47 | 53.21 | 55.76 | 53.65 |
| Number of days of payables | days | 20.17 | 19.36 | 21.00 | 20.08 | 17.19 | 20.47 | 21.55 | 19.95 | 19.79 | 19.95 | 19.65 | 20.43 | 20.06 | 21.20 | 21.64 | 20.41 | 21.24 | 23.29 | 22.88 | 21.24 |
| Cash conversion cycle | days | -20.17 | 26.47 | 27.18 | 26.17 | 30.03 | 24.30 | 26.12 | 25.42 | 24.57 | 25.46 | 28.75 | 25.33 | 29.42 | 28.34 | 31.14 | 29.54 | 34.47 | 33.32 | 36.49 | 36.18 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 20.17
= -20.17
The data indicates that FedEx Corporation has maintained a relatively stable cash conversion cycle (CCC) over the period from August 2020 through November 2024, with fluctuations within a narrow range. Specifically, the CCC ranged from a low of approximately 24.30 days (February 28, 2023) to a high of about 36.49 days (November 30, 2020).
Throughout this period, there was a noticeable decline from the elevated levels observed in late 2020, with the CCC decreasing to a low of around 24.30 days in early 2023, suggesting improvements in inventory management, receivables collection, or payables deferral. The reduction in the CCC reflects enhanced operational efficiencies or greater liquidity management, which may be associated with better supply chain management or tighter credit terms.
After reaching these lows, the CCC showed signs of slight increase again, reaching approximately 30 days by mid-2024. Notably, there is a significant anomaly at the end of the forecast period (May 31, 2025), where the CCC is projected to be approximately -20.17 days. A negative CCC implies that the company is effectively collecting receivables and turning over inventory faster than it pays its suppliers, indicating a highly efficient cash cycle or possibly the strategic timing of payments and collections.
Overall, the trend reveals steady improvement in FedEx's cash conversion efficiency from late 2020 through 2023, with an ongoing focus on operational efficiencies. The negative projection in 2025 may reflect continued enhancements in working capital management or changes in supply chain or payment practices, emphasizing the company's ability to sustain or extend its cash flow advantages in the near future.