HNI Corp (HNI)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 29.44 | 31.00 | 31.74 | 30.51 | 37.17 | 39.68 | 31.93 | 29.04 | 35.13 | 36.00 | 34.34 | 31.48 | 33.67 | 35.06 | 30.12 | 26.49 | 27.39 | 28.33 | 29.38 | 28.39 |
| Days of sales outstanding (DSO) | days | — | — | — | 37.05 | — | — | — | 33.75 | — | — | — | 40.10 | — | — | — | 38.96 | — | — | — | 44.86 |
| Number of days of payables | days | 28.84 | — | — | 30.06 | — | — | — | 26.66 | — | — | — | 40.53 | — | — | — | 36.62 | — | — | — | 39.52 |
| Cash conversion cycle | days | 0.59 | 31.00 | 31.74 | 37.50 | 37.17 | 39.68 | 31.93 | 36.14 | 35.13 | 36.00 | 34.34 | 31.05 | 33.67 | 35.06 | 30.12 | 28.83 | 27.39 | 28.33 | 29.38 | 33.73 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.44 + — – 28.84
= 0.59
The cash conversion cycle of HNI Corp has shown some fluctuations over the past few years.
In December 2019, the cash conversion cycle was 33.73 days, indicating that on average it took the company approximately 33.73 days to convert its investments in inventory and accounts receivable into cash. This number then decreased to 29.38 days by March 2020, reflecting an improvement in the efficiency of the company's cash conversion process.
Throughout the next few quarters, the cash conversion cycle continued to show variations, with some periods seeing further improvements (e.g., June 2020 with 28.33 days) while others experienced slight increases. By December 2020, the cycle stood at 28.83 days before showing a slight increase to 30.12 days by March 2021.
However, in the following quarters, there was a general upward trend in the cash conversion cycle, with periods like June 2021, September 2021, and June 2022 showing figures of 35.06 days, 33.67 days, and 36.00 days, respectively. This indicated that the company was taking longer to convert its investments into cash during these periods.
By September 2024, the cash conversion cycle decreased to 31.00 days before significantly dropping to 0.59 days by December 2024. Such a sharp decline in the cycle suggests a noteworthy improvement in the efficiency of cash conversion during that quarter.
Overall, the analysis of HNI Corp's cash conversion cycle highlights fluctuations in the timeframe it takes the company to convert its working capital investments into cash. These variations may be influenced by factors such as inventory management, accounts receivable collection, and payment terms with suppliers.