HNI Corp (HNI)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.43 | 30.51 | 29.04 | 31.48 | 26.49 |
| Days of sales outstanding (DSO) | days | — | 37.05 | 33.75 | 40.10 | 38.96 |
| Number of days of payables | days | 29.82 | 30.06 | 26.66 | 40.53 | 36.62 |
| Cash conversion cycle | days | 0.61 | 37.50 | 36.14 | 31.05 | 28.83 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.43 + — – 29.82
= 0.61
The cash conversion cycle for HNI Corp has shown a fluctuating trend over the years based on the provided data.
As of December 31, 2020, the company had a cash conversion cycle of 28.83 days, suggesting that it took approximately 28.83 days to convert its investments in inventory and accounts receivable into cash inflows.
By December 31, 2021, the cash conversion cycle increased slightly to 31.05 days, indicating a longer period for the company to convert its working capital into cash.
The trend continued in December 31, 2022, with a further increase in the cash conversion cycle to 36.14 days, indicating potential inefficiencies in managing working capital and converting it into cash.
In December 31, 2023, the cash conversion cycle increased moderately to 37.50 days, reflecting a continued challenge in efficiently managing the company's cash flow and working capital.
Interestingly, by December 31, 2024, the cash conversion cycle dropped significantly to 0.61 days, which may suggest a notable improvement in the company's working capital management efficiency or a change in its operating cycle.
Overall, the fluctuation in the cash conversion cycle over the years indicates varying levels of efficiency in managing working capital, with potential implications for HNI Corp's liquidity and operational performance.