Floor & Decor Holdings Inc (FND)
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 | 91.75 | 114.45 | 111.56 | 100.81 | 104.83 |
| Days of sales outstanding (DSO) | days | 2.31 | 0.63 | 0.37 | — | 0.51 |
| Number of days of payables | days | 56.34 | 52.33 | 73.25 | 64.42 | 66.38 |
| Cash conversion cycle | days | 37.72 | 62.75 | 38.69 | 36.39 | 38.96 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.75 + 2.31 – 56.34
= 37.72
The cash conversion cycle of Floor & Decor Holdings Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle decreased to 37.72 days from 62.75 days in 2022, indicating an improvement in the efficiency of converting its resources into cash. This trend is favorable as a shorter cash conversion cycle suggests that the company is managing its cash, inventory, and accounts receivable more effectively.
Comparing the current cycle to historical data, it is notably lower than the cycle in 2022 but slightly higher than the cycle in 2021 and 2019. This fluctuation may be attributed to changes in the company's operating efficiency, inventory management, and collection of receivables over the years.
Overall, the decreasing trend in the cash conversion cycle from 2022 to 2023 reflects the company's efforts to streamline its operations and optimize working capital management. Further analysis of the underlying factors impacting the cycle in each year would provide more insights into the company's financial performance and efficiency.
Peer comparison
Dec 31, 2023