Monro Muffler Brake Inc (MNRO)
Cash conversion cycle
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1,399.00 | 1,254.16 | 1,369.09 | 1,584.95 | 2,023.42 |
| Days of sales outstanding (DSO) | days | — | — | — | 3.60 | 2.39 |
| Number of days of payables | days | 2,287.46 | 2,226.95 | 1,086.81 | 1,097.56 | 1,074.14 |
| Cash conversion cycle | days | -888.46 | -972.78 | 282.28 | 491.00 | 951.67 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,399.00 + — – 2,287.46
= -888.46
The cash conversion cycle of Monro Muffler Brake Inc has shown significant fluctuations over the past five years. In the most recent fiscal year ending on March 31, 2024, the cash conversion cycle improved to -888.46 days, indicating that the company is able to generate cash from its operations before paying its suppliers and other obligations.
Compared to the preceding year, there was a notable decrease in the cash conversion cycle from -972.78 days in 2023 to -888.46 days in 2024, signifying a more efficient management of cash flows. This improvement suggests that the company may have streamlined its operations, reduced inventory levels, or accelerated its collection of accounts receivable.
In contrast, the cash conversion cycle in the prior years exhibited positive values, indicating that the company was taking longer to convert its investments in inventory and accounts receivable into cash. The cycle was particularly lengthy in 2020 at 951.67 days, illustrating inefficiencies in working capital management during that period.
Overall, the trend towards a negative cash conversion cycle in the more recent years reflects Monro Muffler Brake Inc's ability to effectively manage its working capital and generate cash quickly, which can be beneficial for sustaining operations and pursuing growth opportunities.
Peer comparison
Mar 31, 2024