JM Smucker Company (SJM)

Cash conversion cycle

		Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019
Days of inventory on hand (DOH)	days	55.43	52.19	57.64	55.52	49.79	61.88	67.53	66.82	56.37	54.69	59.63	60.66	52.57	48.74	54.04	54.35	49.62	53.20	55.45	54.92
Days of sales outstanding (DSO)	days	32.88	35.13	26.12	25.53	25.59	23.33	27.16	27.39	23.74	25.86	30.11	25.89	24.07	26.81	26.04	22.74	25.98	23.06	25.34	22.92
Number of days of payables	days	71.30	66.20	66.43	66.06	68.66	61.36	62.66	63.25	61.75	52.84	55.88	57.13	56.64	48.68	46.61	42.64	43.34	31.91	28.55	27.27
Cash conversion cycle	days	17.01	21.12	17.33	14.99	6.72	23.85	32.02	30.96	18.36	27.71	33.86	29.42	20.01	26.88	33.47	34.45	32.26	44.35	52.23	50.57

April 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.43 + 32.88 – 71.30
= 17.01

The cash conversion cycle of JM Smucker Company fluctuated over the past two years. Looking at the trend, the company's cycle ranged from a low of 6.72 days to a high of 52.23 days. In more recent periods, the cycle has shown some volatility, with the latest reported cycle standing at 17.01 days.

A shorter cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory and receivables back into cash, implying effective management of working capital. On the other hand, a longer cycle suggests that the company is taking more time to collect receivables and convert inventory into sales, tying up cash in the process.

Analyzing the ratios, we observe that the company's cycle has varied significantly, potentially indicating fluctuations in sales, inventory management, and collection periods. Further investigation into the underlying reasons for these fluctuations would be necessary to fully understand the implications for JM Smucker Company's financial performance and efficiency in managing its working capital.