Fabrinet (FN)
Cash conversion cycle
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 70.55 | 67.61 | 65.18 | 61.10 | 66.91 | 67.94 | 63.65 | 68.72 | 82.13 | 89.94 | 90.50 | 92.77 | 102.46 | 86.09 | 95.77 | 96.95 | 92.93 | 82.24 | 89.78 | 83.23 |
| Days of sales outstanding (DSO) | days | 81.01 | 73.64 | 79.50 | 80.58 | 75.01 | 76.51 | 78.47 | 72.99 | 73.38 | 79.51 | 78.65 | 73.26 | 73.06 | 76.82 | 69.19 | 66.13 | 67.67 | 72.08 | 76.76 | 70.69 |
| Number of days of payables | days | 77.40 | 66.33 | 70.49 | 59.36 | 63.82 | 64.19 | 57.79 | 55.77 | 60.25 | 70.76 | 73.96 | 71.93 | 80.86 | 76.57 | 77.26 | 77.87 | 76.29 | 64.18 | 71.67 | 69.68 |
| Cash conversion cycle | days | 74.16 | 74.93 | 74.18 | 82.32 | 78.09 | 80.26 | 84.33 | 85.95 | 95.26 | 98.68 | 95.19 | 94.10 | 94.66 | 86.34 | 87.70 | 85.21 | 84.31 | 90.14 | 94.88 | 84.24 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.55 + 81.01 – 77.40
= 74.16
The data on Fabrinet’s cash conversion cycle (CCC) over the period from September 2020 through June 2025 reveals fluctuations that reflect the company’s operational efficiency in managing its working capital. The CCC measures the duration, in days, it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
Starting in September 2020, the CCC was approximately 84.24 days, indicating a relatively efficient cycle. It saw an upward trend through 2020 and into the first half of 2021, reaching a peak of 94.88 days on December 31, 2020, and remaining elevated around the high 80s to low 90s through September 2021. This increase suggests a lengthening of the cycle, potentially due to longer inventory days, extended receivables, or delays in accounts payable, implying temporarily reduced operational efficiency or inventory buildup.
In early 2022, the CCC stabilized slightly but continued to hover around the mid-90s, reaching 94.66 days in June 2022 and 94.10 days in September 2022. The persistence of this elevated level indicates an ongoing period of extended cash conversion times. The data shows a slight increase into late 2022 with December reaching 95.19 days, which may point to challenges such as supply chain disruptions or slower collection periods.
A notable shift occurs starting in the first quarter of 2023, where the CCC begins a downward trajectory. By March 2023, it reaches approximately 98.68 days, indicating the cycle peaked. However, subsequent quarters demonstrate consistent improvement. By June 2023, the CCC decreases slightly to 95.26 days. The most significant improvement is observed into late 2023 and the first half of 2024, where the cycle shortens substantially: December 2023 records 84.33 days, March 2024 declines further to 80.26 days, and June 2024 diminishes to 78.09 days. This trend reflects enhanced operational efficiencies, possibly due to better inventory turnover, faster receivables collection, or optimized payables.
Looking into the later periods, the CCC remains relatively stable at around 82 days through September 2024, with a further decline to 74.18 days in December 2024. The cycle remains relatively consistent through the first half of 2025, with slight variations around 74-75 days, reaching 74.16 days by June 2025.
Overall, the analysis indicates that Fabrinet experienced a period of cyclical elongation of its cash conversion cycle through 2020 to early 2023, followed by a sustained reduction starting mid-2023. The downward trend in the CCC in recent quarters suggests improvement in working capital management, increased operational efficiency, and potentially a strategic focus on reducing inventory and receivables to enhance cash flow liquidity.
Peer comparison
Jun 30, 2025