JM Smucker Company (SJM)
Cash conversion cycle
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 55.46 | 49.79 | 56.34 | 52.36 | 49.59 |
| Days of sales outstanding (DSO) | days | 32.88 | 25.59 | 23.74 | 24.07 | 25.93 |
| Number of days of payables | days | 71.33 | 68.66 | 61.72 | 56.41 | 43.32 |
| Cash conversion cycle | days | 17.01 | 6.72 | 18.36 | 20.03 | 32.20 |
April 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.46 + 32.88 – 71.33
= 17.01
The cash conversion cycle of JM Smucker Company has fluctuated over the past five years. In 2024, the company's cash conversion cycle increased to 17.01 days from 6.72 days in 2023, indicating that it took the company longer to convert its resources (inventory and accounts receivable) into cash during that year.
Comparing to previous years, the cash conversion cycle in 2024 was lower than the cycle in 2020 and 2021, but higher than in 2022 and 2023. This indicates that the company was more efficient in managing its cash conversion in 2024 compared to 2020 and 2021, but less efficient than in 2022 and 2023.
Overall, the recent increase in the cash conversion cycle suggests potential challenges in managing working capital effectively, and the company may need to focus on improving its inventory management and collection of accounts receivable to optimize its cash conversion cycle in the future.