Starbucks Corporation (SBUX)
Cash conversion cycle
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 36.52 | 40.30 | 44.77 | 45.92 | 61.79 | 65.66 | 66.02 | 60.57 | 53.27 | 54.01 | 54.55 | 54.57 | 52.16 | 52.39 | 61.06 | 50.34 | 44.56 | 46.10 | 38.13 | 36.99 |
| Days of sales outstanding (DSO) | days | 11.59 | 12.01 | 11.89 | — | — | 13.62 | — | — | — | 12.07 | 13.18 | 16.24 | 19.23 | 19.69 | 19.89 | 18.23 | 14.20 | 14.54 | 12.58 | 12.86 |
| Number of days of payables | days | 32.41 | 34.46 | 33.88 | 32.92 | 39.89 | 43.48 | 46.12 | 41.94 | 41.95 | 40.80 | 39.71 | 37.52 | 37.24 | 33.70 | 33.19 | 33.65 | 34.34 | 35.86 | 28.78 | 28.11 |
| Cash conversion cycle | days | 15.71 | 17.86 | 22.78 | 13.01 | 21.89 | 35.79 | 19.91 | 18.63 | 11.31 | 25.28 | 28.02 | 33.30 | 34.15 | 38.39 | 47.76 | 34.91 | 24.42 | 24.78 | 21.92 | 21.73 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.52 + 11.59 – 32.41
= 15.71
The cash conversion cycle measures the amount of time it takes for a company to convert its investment in inventory and other resources into cash flows from sales. For Starbucks Corp., the cash conversion cycle has fluctuated over the past year, with the cycle standing at 11.59 days at the end of December 2023, compared to 14.94 days at the end of April 2022.
A lower cash conversion cycle is generally considered favorable as it indicates that the company is able to sell its inventory and collect payment from customers more quickly. Conversely, a longer cycle may suggest inefficiencies in inventory management and collection of receivables.
Starbucks Corp.'s declining cash conversion cycle over the past year may indicate improvements in inventory management or the collection of sales proceeds. However, it is important to note that the specific reasons behind these fluctuations would require further analysis of the company's financial and operational activities.
Peer comparison
Dec 31, 2023
See also:
Starbucks Corporation Cash Conversion Cycle (Quarterly Data)