Frontdoor Inc (FTDR)
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 | — | — | — | — | — | 11.07 | 9.74 | — | — | — | — | 13.84 | — | — | — | — | — | — | — | |
| Days of sales outstanding (DSO) | days | 1.23 | 1.46 | 1.28 | 1.31 | 1.10 | 0.88 | 1.33 | 1.12 | 1.60 | 1.15 | 1.17 | 0.97 | 1.24 | 2.52 | 2.32 | 2.10 | 2.94 | 2.17 | 2.50 | |
| Number of days of payables | days | 30.99 | 35.24 | 30.98 | 31.77 | 30.67 | 33.98 | 38.98 | 31.61 | 29.49 | 34.50 | 36.86 | 30.46 | 26.52 | 34.41 | 38.15 | 29.01 | 25.47 | 29.44 | 31.04 | |
| Cash conversion cycle | days | -29.76 | -33.79 | -29.70 | -30.47 | -29.57 | -22.03 | -27.90 | -30.48 | -27.89 | -33.35 | -35.69 | -15.64 | -25.28 | -31.89 | -35.83 | -26.91 | -22.53 | -27.26 | -28.54 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 1.23 – 30.99
= -29.76
Frontdoor Inc.'s cash conversion cycle has shown variations over the past eight quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle indicates more efficient management of liquidity and working capital.
In Q4 2023, Frontdoor Inc. achieved a cash conversion cycle of -29.76 days, an improvement from the previous quarter. This implies that the company is able to convert its investments into cash at a faster rate, potentially due to effective inventory management or accelerated collection of receivables.
Comparing the performance over the past eight quarters, the company has generally maintained a negative cash conversion cycle, indicating a consistent trend of efficient working capital management. This signifies that Frontdoor Inc. is successfully minimizing the time it takes to convert its resources into cash, leading to improved liquidity and operational efficiency.
Overall, the trend of negative cash conversion cycles suggests that Frontdoor Inc. is effectively managing its inventory, payables, and receivables, thereby optimizing its working capital and cash flow operations. This can contribute to the company's financial stability and resilience in the market.
Peer comparison
Dec 31, 2023