Performance Food Group Co (PFGC)
Cash conversion cycle
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 27.08 | 25.62 | 21.84 | 23.51 | 24.91 | 24.05 | 23.08 | 24.03 | 24.37 | 27.15 | 27.29 | 32.46 | 34.45 | 24.62 | 23.34 | 22.52 | 23.94 | 25.14 | 29.08 | 24.07 |
| Days of sales outstanding (DSO) | days | 16.63 | 15.80 | 15.42 | 14.95 | 15.31 | 15.62 | — | 14.59 | — | 16.85 | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 22.91 | 15.62 | 22.89 | 26.09 | 22.14 | 18.58 |
| Cash conversion cycle | days | 43.71 | 41.42 | 37.26 | 38.46 | 40.21 | 39.67 | 23.08 | 38.61 | 24.37 | 44.00 | 27.29 | 32.46 | 34.45 | 24.62 | 0.43 | 6.90 | 1.05 | -0.95 | 6.94 | 5.49 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.08 + 16.63 – —
= 43.71
The cash conversion cycle of Performance Food Group Co has shown variability over the analyzed periods. It is important to note that the cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales.
From December 2019 to March 2020, the company's cash conversion cycle increased from 5.49 days to 6.94 days, indicating a slightly longer period to convert inventory into cash. Subsequently, there was a notable improvement as the cycle turned negative in June 2020, implying that Performance Food Group Co was able to convert its inventory into cash quickly and efficiently during that period.
Following this, the cycle fluctuated throughout the following quarters but generally showed positive values, suggesting a more typical operation of converting inventory into cash. Notably, there were significant increases in the cash conversion cycle in June 2021, September 2021, and December 2021, reaching 24.62 days, 34.45 days, and 32.46 days, respectively.
Towards the end of 2022 and the beginning of 2023, the cash conversion cycle decreased to around 23 days, indicating an improvement in the efficiency of converting inventory into cash. However, in the subsequent quarters, there was an increase again, with the cycle peaking at 43.71 days by December 2024.
Overall, the trend in the cash conversion cycle of Performance Food Group Co demonstrates fluctuations and periodic shifts in the efficiency of converting inventory into cash. It is essential for the company to closely monitor and manage its working capital components to ensure an optimal cash conversion cycle that supports liquidity and operational efficiency.
Peer comparison
Dec 31, 2024