JM Smucker Company (SJM)
Cash conversion cycle
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 82.64 | 74.62 | 73.14 | 79.24 | 74.89 | 69.15 | 75.17 | 71.81 | 64.35 | 80.17 | 89.09 | 88.73 | 75.04 | 74.35 | 80.17 | 82.58 | 72.03 | 65.77 | 73.61 | 73.87 |
| Days of sales outstanding (DSO) | days | 25.89 | 27.18 | 33.25 | 31.56 | 32.87 | 35.11 | 26.19 | 25.55 | 25.57 | 23.40 | 27.23 | 27.56 | 23.94 | 26.07 | 30.43 | 26.19 | 24.34 | 27.01 | 26.10 | 22.72 |
| Number of days of payables | days | 88.06 | 77.85 | 83.22 | 86.65 | 96.32 | 87.71 | 86.63 | 85.45 | 88.75 | 79.50 | 82.67 | 83.99 | 82.21 | 71.84 | 75.13 | 77.78 | 77.60 | 65.68 | 63.49 | 57.96 |
| Cash conversion cycle | days | 20.47 | 23.95 | 23.18 | 24.16 | 11.44 | 16.55 | 14.72 | 11.92 | 1.18 | 24.08 | 33.65 | 32.30 | 16.78 | 28.59 | 35.48 | 30.99 | 18.77 | 27.10 | 36.21 | 38.64 |
April 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.64 + 25.89 – 88.06
= 20.47
The cash conversion cycle (CCC) for JM Smucker Company demonstrates notable fluctuations over the observed period from July 31, 2020, to April 30, 2025. Initially, the CCC was approximately 38.64 days as of July 31, 2020, indicating the average number of days it takes the company to convert its investments in inventory and receivables into cash, net of its payables.
Throughout 2020 and 2021, the CCC shows a declining trend, reaching a low of approximately 16.78 days by April 30, 2022. This decrease suggests improvements in working capital efficiency, possibly due to shortened receivable periods, inventory turnover enhancements, or extended payment terms with suppliers.
Subsequently, the CCC exhibits some variability. It rose slightly to around 35.48 days in October 2021, then fell again to a low of roughly 24.08 days by January 2023. The most significant reduction appears at April 2023, when the CCC dropped dramatically to approximately 1.18 days, indicating an exceptionally efficient working capital cycle during that period.
Following this peak efficiency, there is an increase in the CCC to about 11.92 days by July 2023 and further to approximately 14.72 days in October 2023. The cycle size stays relatively stable but remains elevated compared to the singleton low point in April 2023.
From early 2024 onward, the CCC shows signs of stabilization and moderate fluctuations. It reaches around 16.55 days in January 2024, then dips again to 11.44 days in April 2024. The cycle length then increases to approximately 24.16 days by July 2024 and slightly decreases to 23.18 days in October 2024, with projections indicating a gradual return to around 23.95 days in January 2025 and 20.47 days by April 2025.
Overall, the trend illustrates an initial period of improvement in working capital efficiency, followed by some fluctuations, including periods of heightened efficiency and cycles of slight delays. The pronounced decrease around April 2023 indicates the company achieved a notably streamlined cash conversion process during that period. Nonetheless, the subsequent increases suggest some operational or market factors may have impacted the cycle's efficiency, but it overall remains within a relatively narrow and manageable range, reflecting periods of operational adjustments and competitive dynamics.