Grocery Outlet Holding Corp (GO)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 35.61 | 32.37 | 34.32 | 34.96 | 35.36 | 36.31 | 36.51 | 35.47 | 33.83 | 30.03 | 30.42 | 29.69 | 29.94 | 32.40 | 30.51 | |||
| Days of sales outstanding (DSO) | days | 1.77 | 2.17 | 1.38 | — | 1.56 | — | — | — | 1.24 | — | — | — | — | — | — | |||
| Number of days of payables | days | 21.30 | 19.30 | 15.77 | — | 14.56 | — | — | — | 14.99 | — | — | — | — | — | — | |||
| Cash conversion cycle | days | 16.07 | 15.24 | 19.93 | 34.96 | 22.36 | 36.31 | 36.51 | 35.47 | 20.07 | 30.03 | 30.42 | 29.69 | 29.94 | 32.40 | 30.51 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 35.61 + 1.77 – 21.30
= 16.07
The cash conversion cycle of Grocery Outlet Holding Corp has shown fluctuations over the past few quarters. The cycle represents the time taken by the company to convert its investments in inventory into cash from the sale of products. A lower cash conversion cycle indicates a more efficient management of working capital.
In the most recent quarter, ending December 31, 2023, the cash conversion cycle was 16.07 days, showing an improvement compared to the previous quarter where it was 15.24 days. This suggests that the company was able to generate cash from its operations more quickly in the latest period.
Looking back over the past year, the trend in the cash conversion cycle has been mixed. There were periods of increased efficiency, where the cycle was shorter, such as in the first quarter of 2021 and the third quarter of 2021. However, there were also periods where the cycle lengthened, indicating potential challenges in managing inventory and accounts receivable, such as in the first quarter of 2020 and the third quarter of 2020.
Overall, Grocery Outlet Holding Corp should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and efficiency in its operations.
Peer comparison
Dec 31, 2023