Hormel Foods Corporation (HRL)
Cash conversion cycle
Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Jul 25, 2021 | Apr 25, 2021 | Jan 24, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 52.65 | 54.73 | 55.08 | 51.72 | 55.22 | 57.13 | 57.42 | 56.55 | 55.92 | 53.84 | 51.58 | 46.56 | 48.35 | 55.54 | 50.68 | 45.79 | 45.71 | 41.69 | 45.07 | 45.95 |
Days of sales outstanding (DSO) | days | 26.68 | 22.26 | 22.32 | 22.73 | 25.00 | 23.90 | 23.02 | 23.53 | 25.76 | 23.54 | — | 25.13 | 29.10 | 32.26 | 27.11 | 27.02 | 28.30 | 24.50 | 20.42 | 21.60 |
Number of days of payables | days | 24.57 | 22.40 | 22.76 | — | 25.35 | 23.13 | — | — | 26.61 | — | — | — | 28.01 | 25.47 | 23.81 | 23.54 | 27.47 | 22.81 | 21.58 | 21.30 |
Cash conversion cycle | days | 54.76 | 54.59 | 54.65 | 74.44 | 54.87 | 57.91 | 80.44 | 80.09 | 55.07 | 77.38 | 51.58 | 71.69 | 49.43 | 62.34 | 53.99 | 49.28 | 46.54 | 43.38 | 43.91 | 46.25 |
October 27, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.65 + 26.68 – 24.57
= 54.76
The cash conversion cycle of Hormel Foods Corporation has been relatively stable over the past two years, ranging from 43.38 days to 80.44 days. The company's cash conversion cycle measures the time it takes for Hormel Foods to convert its investments in inventory and other resources into cash flows from sales.
A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and convert its resources into cash quickly, which is a positive sign. Conversely, a longer cash conversion cycle may suggest potential inefficiencies in the company's operations or difficulties in managing inventory levels.
Hormel Foods has generally maintained a moderate cash conversion cycle, with some fluctuations observed in certain periods. It is important for the company to continue monitoring and managing its inventory levels, accounts receivable, and accounts payable effectively to optimize its cash conversion cycle and overall liquidity position.