Flowers Foods Inc (FLO)

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	14.07	14.04	12.54	11.57	12.23
Days of sales outstanding (DSO)	days	24.78	26.54	26.82	25.14	28.48
Number of days of payables	days	24.30	28.58	24.95	20.87	22.44
Cash conversion cycle	days	14.55	12.01	14.41	15.84	18.28

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 14.07 + 24.78 – 24.30
= 14.55

The cash conversion cycle of Flowers Foods Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 14.55 days from 12.01 days in 2022. This indicates a slight decrease in efficiency in converting its investments in inventory and receivables into cash.

Comparing to 2021 where the cycle was 14.41 days, the company has not shown a significant improvement in managing its working capital. However, it is worth noting that there has been a decline in the cycle since 2019 when it stood at 18.28 days.

Flowers Foods Inc should continue to monitor and manage its cash conversion cycle effectively to optimize its working capital and strengthen its cash flow position. Any further increase in the cycle could signal inefficiencies in operations that may need to be addressed.