Jack In The Box Inc (JACK)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	1.95	1.63	2.64	2.25	1.90
Days of sales outstanding (DSO)	days	19.41	21.50	25.81	23.72	28.02
Number of days of payables	days	34.53	35.52	33.26	28.03	32.74
Cash conversion cycle	days	-13.17	-12.39	-4.81	-2.06	-2.82

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.95 + 19.41 – 34.53
= -13.17

Jack In The Box Inc has consistently maintained a negative cash conversion cycle over the past five years, indicating an efficient management of its working capital. The company's ability to convert its investments in inventory and accounts receivable into cash quickly is evident from the consistently negative values. This suggests that Jack In The Box is able to collect cash from customers and manage its inventory effectively, resulting in a shorter cash conversion cycle. The trend of decreasing cash conversion cycle over the years also reflects an improvement in the company's operational efficiency and liquidity management. Overall, the consistently negative cash conversion cycle signifies that Jack In The Box Inc is efficient in managing its cash flows and working capital, which is a positive indicator for investors and stakeholders.