H B Fuller Company (FUL)
Cash conversion cycle
| Nov 30, 2024 | Aug 31, 2024 | Jun 1, 2024 | Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.07 | 74.99 | 73.24 | 72.18 | 64.49 | 66.79 | 69.08 | 70.17 | 64.44 | 73.13 | 74.19 | 78.64 | 67.28 | 72.14 | 70.61 | 67.87 | 58.01 | 64.40 | 70.17 | 67.07 |
| Days of sales outstanding (DSO) | days | 57.10 | 59.12 | 59.04 | 54.63 | 60.08 | 58.96 | — | — | 59.13 | 64.30 | 65.83 | 65.99 | 68.44 | 66.21 | 70.43 | 64.23 | 67.36 | 63.15 | 58.72 | 58.21 |
| Number of days of payables | days | 71.55 | 72.71 | 69.99 | 67.83 | 64.14 | 55.80 | 60.38 | 60.05 | 60.36 | 64.88 | 69.27 | 76.28 | 75.07 | 75.75 | 71.55 | 65.22 | 56.80 | 49.50 | 57.70 | 58.75 |
| Cash conversion cycle | days | 53.62 | 61.41 | 62.28 | 58.98 | 60.42 | 69.94 | 8.70 | 10.12 | 63.21 | 72.55 | 70.75 | 68.35 | 60.65 | 62.59 | 69.49 | 66.88 | 68.57 | 78.06 | 71.19 | 66.53 |
November 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.07 + 57.10 – 71.55
= 53.62
The cash conversion cycle of H B Fuller Company has shown fluctuations over the period under review. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle is generally considered favorable as it indicates that the company is efficiently managing its working capital.
From February 29, 2020, to November 27, 2021, the cash conversion cycle fluctuated within a range of approximately 60 to 78 days. During this period, the company experienced some variability in its ability to convert its resources into cash efficiently.
However, from February 26, 2022, to November 30, 2024, the cash conversion cycle generally trended downwards, indicating an improvement in the company's efficiency in managing its working capital. The cycle decreased from 68.35 days to 53.62 days over this period, suggesting that H B Fuller Company was able to shorten the time it takes to convert its investments into cash flows.
The significant decrease in the cash conversion cycle observed from March 4, 2023, to June 3, 2023, where the cycle dropped from 10.12 days to 8.70 days, may indicate a more efficient use of resources or improved management of accounts receivable, inventory, and accounts payable during this particular period.
Overall, the analysis of H B Fuller Company’s cash conversion cycle suggests that the company made improvements in managing its working capital efficiency, which is a positive indicator for its financial health and operational performance.
Peer comparison
Nov 30, 2024