Starbucks Corporation (SBUX)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 50.46 | 65.66 | 54.01 | 57.90 | 46.10 |
| Days of sales outstanding (DSO) | days | 12.01 | 13.62 | 12.07 | 19.69 | 14.54 |
| Number of days of payables | days | 43.14 | 43.48 | 40.80 | 37.24 | 35.86 |
| Cash conversion cycle | days | 19.33 | 35.79 | 25.28 | 40.35 | 24.78 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.46 + 12.01 – 43.14
= 19.33
The cash conversion cycle for Starbucks Corporation has shown fluctuations over the past five years. In Sep 30, 2023, the company's cash conversion cycle decreased significantly to 19.33 days compared to the previous year's 35.79 days. This indicates an improvement in the company's ability to efficiently convert its investments in inventory and accounts receivable into cash.
In comparison to Sep 30, 2021 and Sep 30, 2019, where the cash conversion cycle was 25.28 days and 24.78 days respectively, the company's efficiency has improved further in managing its working capital.
However, in Sep 30, 2020, Starbucks experienced a higher cash conversion cycle of 40.35 days, indicating a delay in converting its inventory and receivables into cash during that period.
Overall, the trend in Starbucks' cash conversion cycle suggests that the company has been successful in managing its working capital efficiently in recent years, with a notable improvement in 2023.
Peer comparison
Sep 30, 2023