Fabrinet (FN)
Cash conversion cycle
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 66.91 | 67.94 | 63.65 | 68.72 | 82.13 | 89.98 | 90.55 | 92.82 | 102.52 | 86.09 | 95.77 | 96.95 | 92.93 | 82.24 | 89.78 | 83.23 | 77.67 | 72.76 | 74.56 | 82.55 |
| Days of sales outstanding (DSO) | days | 75.01 | 76.51 | 78.47 | 72.99 | 73.38 | 76.53 | 76.65 | 71.08 | 70.88 | 74.55 | 66.91 | 63.72 | 65.36 | 68.56 | 73.30 | 68.14 | 66.02 | 68.42 | 69.41 | 62.17 |
| Number of days of payables | days | 63.82 | 64.19 | 57.79 | 55.77 | 60.25 | 70.80 | 74.00 | 71.96 | 80.90 | 76.57 | 77.26 | 77.87 | 76.29 | 64.18 | 71.67 | 69.68 | 63.09 | 60.18 | 59.50 | 64.74 |
| Cash conversion cycle | days | 78.09 | 80.26 | 84.33 | 85.95 | 95.26 | 95.71 | 93.20 | 91.93 | 92.50 | 84.07 | 85.41 | 82.80 | 82.00 | 86.62 | 91.41 | 81.69 | 80.61 | 81.00 | 84.47 | 79.98 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.91 + 75.01 – 63.82
= 78.09
The cash conversion cycle of Fabrinet has displayed some fluctuations over the past few quarters. The trend shows that the cash conversion cycle has ranged from a low of 78.09 days to a high of 95.71 days in the last eight quarters.
The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash received from customers. A shorter cash conversion cycle indicates that a company is able to efficiently manage its inventories, collect receivables quickly, and extend payables.
In analyzing Fabrinet's cash conversion cycle, it appears that the company has been able to effectively manage its working capital over the quarters. However, the slight increase in the cash conversion cycle in recent quarters may warrant further investigation to understand the factors contributing to this trend.
Overall, a detailed examination of the components of the cash conversion cycle, including days inventory outstanding, days sales outstanding, and days payables outstanding, would provide more insights into Fabrinet's working capital management efficiency and potential areas for improvement.
Peer comparison
Jun 30, 2024