Frontdoor Inc (FTDR)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | 10.70 | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 10.70 | 0.00 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
Frontdoor Inc's cash conversion cycle provides valuable insights into the efficiency of its working capital management. The cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources back into cash.
Looking at the data provided, we observe that Frontdoor Inc's cash conversion cycle was 0.00 days on December 31, 2020. This indicates that the company was able to efficiently manage its working capital and convert its investments into cash quickly during that period.
However, on December 31, 2021, the cash conversion cycle increased to 10.70 days. This suggests that Frontdoor Inc's efficiency in converting its investments into cash may have decreased, possibly due to factors such as stretched payment terms, slow inventory turnover, or delayed collections from customers.
Subsequently, on December 31, 2022, December 31, 2023, and December 31, 2024, the cash conversion cycle returned to 0.00 days. This could indicate that the company took measures to improve its working capital management and efficiency in converting investments back into cash, leading to a more favorable cash conversion cycle.
In conclusion, monitoring the cash conversion cycle over time can provide valuable insights into Frontdoor Inc's operational efficiency and working capital management practices.
Peer comparison
Dec 31, 2024