CarMax Inc (KMX)
Cash conversion cycle
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 61.23 | 56.35 | 50.59 | 65.37 | 69.54 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 61.23 | 56.35 | 50.59 | 65.37 | 69.54 |
February 28, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.23 + — – —
= 61.23
The cash conversion cycle of CarMax Inc has shown a fluctuating trend over the years, indicating the efficiency of the company's working capital management.
- On February 28, 2021, CarMax had a cash conversion cycle of 69.54 days, suggesting that it took the company approximately 69.54 days to convert its investments in raw materials and other inputs into cash inflows from sales.
- By February 28, 2022, the cash conversion cycle decreased to 65.37 days, showing an improvement in the efficiency of CarMax's inventory turnover and accounts receivable collection.
- The cycle further decreased to 50.59 days by February 28, 2023, indicating that CarMax was able to further optimize its working capital management and convert its investments into cash more quickly.
- However, by February 29, 2024, the cash conversion cycle increased to 56.35 days, suggesting a possible slowdown in the company's working capital efficiency.
- Finally, by February 28, 2025, the cash conversion cycle dropped to 0.00 days, which might indicate a unique or exceptional circumstance.
Overall, analyzing the cash conversion cycle can provide insights into how efficiently CarMax Inc manages its working capital and cash flow, playing a crucial role in the company's financial performance and liquidity position.
Peer comparison
Feb 28, 2025