Monro Muffler Brake Inc (MNRO)
Cash conversion cycle
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 68.20 | 61.90 | 69.16 | 81.08 |
| Days of sales outstanding (DSO) | days | — | 11.75 | 3.66 | 8.79 | 13.37 |
| Number of days of payables | days | — | 111.51 | 109.90 | 54.90 | 56.15 |
| Cash conversion cycle | days | 0.00 | -31.56 | -44.35 | 23.05 | 38.30 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle is a crucial metric that indicates how efficiently a company manages its working capital. It represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing Monro Muffler Brake Inc's cash conversion cycle over the years reveals interesting trends. In March 31, 2021, the company had a cash conversion cycle of 38.30 days, indicating that it took over a month to convert its investments into cash inflows. This may suggest that the company was holding onto inventory for an extended period before realizing sales.
By March 31, 2022, Monro Muffler Brake Inc showed improvement in its cash conversion cycle, reducing it to 23.05 days. This decrease signifies that the company became more efficient in managing its working capital and converting its inventory into cash more promptly.
Surprisingly, in the following years, the cash conversion cycle entered negative territory, with -44.35 days on March 31, 2023, and -31.56 days on March 31, 2024. A negative cash conversion cycle usually indicates that the company is able to collect cash from customers before paying its own suppliers, which can be a favorable sign of strong liquidity management and efficient operations.
Finally, by March 31, 2025, Monro Muffler Brake Inc reported a cash conversion cycle of 0.00 days, implying that the company was able to streamline its working capital management, essentially achieving a balance between paying suppliers and collecting cash from customers without delays.
Overall, the trend in Monro Muffler Brake Inc's cash conversion cycle showcases a journey towards operational efficiency and improved working capital management. The company's ability to reduce the cash conversion cycle and even reach negative territory reflects positively on its liquidity position and operational effectiveness.
Peer comparison
Mar 31, 2025