Fabrinet (FN)
Cash conversion cycle
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 70.55 | 66.91 | 82.13 | 102.52 | 92.93 |
| Days of sales outstanding (DSO) | days | 81.01 | 75.01 | 73.38 | 73.04 | 67.67 |
| Number of days of payables | days | 77.40 | 63.82 | 60.25 | 80.90 | 76.29 |
| Cash conversion cycle | days | 74.16 | 78.09 | 95.26 | 94.65 | 84.31 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.55 + 81.01 – 77.40
= 74.16
The cash conversion cycle (CCC) for Fabrinet exhibits fluctuating trends over the period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the CCC was recorded at approximately 84.31 days. This figure increased significantly by June 30, 2022, reaching around 94.65 days, and further slightly rose to approximately 95.26 days by June 30, 2023. These increases indicate a lengthening in the time it takes for Fabrinet to convert its investments in inventory and receivables into cash, potentially reflecting slower operational efficiencies or changes in credit and inventory management during this period.
Subsequently, the data shows a trend reversal beginning in 2024, with the CCC decreasing to approximately 78.09 days by June 30, 2024, and further declining to about 74.16 days by June 30, 2025. This reduction suggests improvements in the company's operational cycle, possibly due to more efficient inventory turnover, faster receivables collection, or shortened payables period, which collectively contribute to a shorter cash cycle.
Overall, the observed pattern indicates that after experiencing a rise in CCC during 2021 to 2023, Fabrinet managed to implement measures or experienced operational changes that shortened its cash conversion period starting in 2024. The decline in CCC enhances the company's liquidity position and operational efficiency, reducing the time between cash outlays for inventory and cash inflows from sales.
Peer comparison
Jun 30, 2025