Flowers Foods Inc (FLO)

Cash conversion cycle

		Dec 31, 2023	Oct 7, 2023	Jul 15, 2023	Apr 22, 2023	Dec 31, 2022	Oct 8, 2022	Apr 23, 2022	Dec 31, 2021	Oct 9, 2021	Jul 17, 2021	Apr 24, 2021	Dec 31, 2020	Sep 30, 2020	Jul 11, 2020	Apr 18, 2020	Dec 31, 2019	Oct 5, 2019	Jul 13, 2019	Apr 20, 2019	Dec 31, 2018
Days of inventory on hand (DOH)	days	14.08	14.09	18.25	18.29	26.87	33.53	19.88	19.03	15.57	14.96	21.45	20.50	21.36	20.75	18.32	23.30	31.61	45.05	92.61	95.46
Days of sales outstanding (DSO)	days	24.78	27.29	32.05	26.31	27.37	—	27.64	26.82	—	—	25.08	25.14	—	—	—	—	—	—	—	—
Number of days of payables	days	24.32	25.31	34.02	33.86	54.70	70.05	39.84	37.85	31.02	31.45	40.36	36.98	42.87	41.41	34.77	42.73	61.08	93.22	179.21	188.45
Cash conversion cycle	days	14.54	16.06	16.28	10.74	-0.45	-36.51	7.69	8.00	-15.45	-16.49	6.17	8.65	-21.51	-20.66	-16.45	-19.43	-29.47	-48.17	-86.60	-93.00

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 14.08 + 24.78 – 24.32
= 14.54

The cash conversion cycle of Flowers Foods Inc has shown fluctuation over the past few years. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A positive cash conversion cycle indicates the company takes longer to convert its investments into cash, while a negative cycle suggests efficient management in converting investments into cash.

From December 31, 2018, to April 24, 2021, Flowers Foods Inc had a positive cash conversion cycle, indicating a longer time to convert investments into cash. However, there was a significant improvement in efficiency as the cycle turned negative, reaching its lowest point of -93.00 days on December 31, 2018. This suggests the company was able to convert its investments into cash more quickly than in previous years.

Subsequently, the cash conversion cycle fluctuated between negative and positive values, indicating varying efficiency in managing cash flows from investments. The cycle fluctuated between -36.51 days on October 8, 2022, and 16.28 days on July 15, 2023. The cycle ended at 14.54 days on December 31, 2023, showing a moderate efficiency in converting investments into cash at the end of the period.

Overall, Flowers Foods Inc has shown improvement in managing its cash conversion cycle, transitioning from a positive cycle to a more efficient negative cycle in recent years. However, the fluctuations in the cycle indicate the need for continuous monitoring and management of working capital to optimize cash flows and operational efficiency.