Floor & Decor Holdings Inc (FND)
Cash conversion cycle
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 91.75 | 93.89 | 100.21 | 102.32 | 114.45 | 121.36 | 130.19 | 118.31 | 111.56 | 99.59 | 87.08 | 87.11 | 100.82 | 141.69 | 151.74 | 146.97 | 152.62 | 91.78 | 88.91 | 90.98 |
| Days of sales outstanding (DSO) | days | 2.31 | 1.34 | 1.17 | — | 0.63 | 0.87 | 1.33 | — | 0.37 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 56.34 | 59.99 | 56.81 | 49.59 | 52.33 | 59.02 | 74.60 | 70.86 | 73.24 | 75.83 | 67.39 | 57.65 | 64.42 | 85.81 | 83.25 | 79.81 | 96.65 | 60.37 | 54.31 | 47.73 |
| Cash conversion cycle | days | 37.72 | 35.24 | 44.57 | 52.73 | 62.75 | 63.22 | 56.92 | 47.45 | 38.69 | 23.76 | 19.69 | 29.46 | 36.40 | 55.88 | 68.49 | 67.16 | 55.98 | 31.41 | 34.60 | 43.26 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.75 + 2.31 – 56.34
= 37.72
Floor & Decor Holdings Inc's cash conversion cycle has shown some fluctuations over the past five years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficiently managing its working capital.
In the latest period ending December 31, 2023, Floor & Decor Holdings Inc's cash conversion cycle was 37.72 days, which improved compared to the previous quarter. This suggests that the company was able to reduce the time it takes to convert inventory into cash. However, the cycle is still longer than it was in the same period the previous year, indicating some inefficiencies in managing working capital.
Over the past five years, the company has experienced various fluctuations in its cash conversion cycle, with longer cycles in some periods and shorter cycles in others. This could be influenced by factors such as changing demand patterns, inventory management practices, and payment terms with suppliers and customers. It is important for Floor & Decor Holdings Inc to closely monitor and analyze these fluctuations to identify areas for improvement in its working capital management processes.
Peer comparison
Dec 31, 2023