Hasbro Inc (HAS)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.79 | 55.42 | 49.18 | 35.95 | 48.23 |
| Days of sales outstanding (DSO) | days | 75.09 | 70.57 | 85.30 | 92.94 | 109.08 |
| Number of days of payables | days | 25.43 | 34.99 | 51.68 | 38.66 | 37.18 |
| Cash conversion cycle | days | 74.45 | 91.00 | 82.79 | 90.23 | 120.13 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.79 + 75.09 – 25.43
= 74.45
The cash conversion cycle of Hasbro, Inc. has shown fluctuations over the past five years. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, the cash conversion cycle decreased to 73.25 days from 118.21 days in 2022, reflecting a significant improvement in the efficiency of Hasbro's operations in managing its working capital. This reduction indicates that the company was able to convert its resources into cash more quickly, potentially due to improved inventory management or faster collection of receivables.
Comparing 2023 to previous years, the company's cash conversion cycle also improved from 79.98 days in 2021 and 86.60 days in 2020. This trend suggests that Hasbro has been more effective in managing its working capital and streamlining its operations over the years.
Furthermore, the current cash conversion cycle of 73.25 days is notably lower than the cycle of 129.71 days reported in 2019. This indicates that Hasbro has made substantial progress in optimizing its cash conversion efficiency and liquidity management over the past five years.
Overall, the decreasing trend in the cash conversion cycle suggests that Hasbro has been successful in improving its working capital management, which is crucial for sustaining cash flow, meeting financial obligations, and supporting future growth initiatives.