H B Fuller Company (FUL)
Cash conversion cycle
| 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 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 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 | 58.90 | 64.53 | 64.95 |
| Days of sales outstanding (DSO) | days | 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 | 62.14 | 60.58 | — |
| Number of days of payables | days | 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 | 52.19 | 47.08 | 50.91 |
| Cash conversion cycle | days | 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 | 68.84 | 78.03 | 14.03 |
March 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.18 + 54.63 – 67.83
= 58.98
The cash conversion cycle of H B Fuller Company has fluctuated over the past few quarters, indicating varying efficiencies in managing its operating cycle. Generally, a shorter cash conversion cycle is favorable as it signifies that the company is able to convert its investments in inventory and accounts receivable into cash more quickly.
In the most recent quarter, the company's cash conversion cycle was 58.98 days, which was an improvement from the previous quarter's 60.42 days. This suggests that H B Fuller was more effective in managing its working capital and converting its sales into cash in the latest period.
On the other hand, looking back over the last few quarters, there were instances where the cash conversion cycle was notably higher, such as in Sep 2, 2023, and Nov 28, 2020, where it reached 69.94 days and 78.06 days respectively. These longer cycles might indicate potential inefficiencies in managing inventory, collecting receivables, or paying off liabilities in those periods.
Overall, H B Fuller Company should focus on sustaining the improvements seen in the most recent quarter and continuously strive to optimize its cash conversion cycle to enhance its liquidity and financial performance.