Hormel Foods Corporation (HRL)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.19 | 54.44 | 55.67 | 59.49 | 59.03 | 59.54 | 57.85 | 53.11 | 53.23 | 56.53 | 57.57 | 62.26 | 60.85 | 61.39 | 58.31 | 58.02 | 57.18 | 58.10 | 59.22 | 55.21 |
| Days of sales outstanding (DSO) | days | — | — | 26.81 | — | 22.78 | — | 22.19 | — | 22.25 | — | 24.95 | — | 24.45 | — | — | 23.13 | — | 25.59 | — | — |
| Number of days of payables | days | — | — | 25.98 | — | 24.16 | — | 23.90 | — | — | — | 26.43 | — | 24.63 | — | — | — | — | 27.65 | — | — |
| Cash conversion cycle | days | 53.19 | 54.44 | 56.50 | 59.49 | 57.65 | 59.54 | 56.14 | 53.11 | 75.48 | 56.53 | 56.09 | 62.26 | 60.67 | 61.39 | 58.31 | 81.15 | 57.18 | 56.04 | 59.22 | 55.21 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.19 + — – —
= 53.19
The cash conversion cycle is a key metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash collected from customers. For Hormel Foods Corporation, the cash conversion cycle has fluctuated over the period represented in the data provided.
From May 1, 2022, to October 31, 2024, Hormel Foods Corporation's cash conversion cycle ranged from a low of 53.11 days to a high of 81.15 days. This indicates that, on average, it took the company between 53 to 81 days to convert its investments in inventory and other resources into cash collected from customers during this period.
Analyzing the trend in the cash conversion cycle, there is some variability, with fluctuations observed across the different dates. Generally, a lower cash conversion cycle is considered favorable as it implies the company is able to efficiently manage its working capital and quickly convert its assets into cash. Conversely, a higher cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers.
Overall, further analysis and comparison with industry peers would provide a more comprehensive understanding of Hormel Foods Corporation's efficiency in managing its cash conversion cycle and working capital.