Hershey Co (HSY)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 75.66 | 76.63 | 87.10 | 66.13 | 80.06 | 80.11 | 83.03 | 70.57 | 72.32 | 75.49 | 81.59 | 73.87 | 73.29 | 77.53 | 82.81 | 73.39 | 79.11 | 79.85 | 82.29 | 68.87 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 75.66 | 76.63 | 87.10 | 66.13 | 80.06 | 80.11 | 83.03 | 70.57 | 72.32 | 75.49 | 81.59 | 73.87 | 73.29 | 77.53 | 82.81 | 73.39 | 79.11 | 79.85 | 82.29 | 68.87 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 75.66 + — – —
= 75.66
The cash conversion cycle for Hershey Co has fluctuated over the periods analyzed. It is a measure of how long it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
From March 31, 2020 to June 30, 2020, the cycle increased from 68.87 days to 82.29 days, indicating an extended time to convert resources into cash. This trend continued until December 31, 2020, before showing a slight improvement in March 31, 2021.
There was a significant spike in the cycle by June 30, 2021, reaching 82.81 days, which may have been attributed to challenges in managing inventory or collections. The cycles remained relatively high through September 30, 2021, before decreasing to 73.29 days by December 31, 2021.
Subsequently, there were fluctuations in the cash conversion cycle from March 31, 2022 to June 30, 2024, showing both improvements and deteriorations in the company's efficiency in converting resources into cash. For example, there was a notable increase in the cycle from June 30, 2023 to September 30, 2023, which indicates potential issues in managing working capital.
Overall, Hershey Co's cash conversion cycle analysis highlights the company's efficiency in managing inventories, accounts receivable, and accounts payable. Monitoring and potentially optimizing this cycle can help the company improve its cash flow management and overall financial performance.
Peer comparison
Dec 31, 2024