Scotts Miracle-Gro Company (SMG)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 64.57 | 88.45 | 113.98 | 96.24 | 62.67 |
| Days of sales outstanding (DSO) | days | 18.16 | 32.93 | 28.68 | 36.49 | 42.78 |
| Number of days of payables | days | 27.99 | 27.25 | 35.85 | 52.06 | 39.40 |
| Cash conversion cycle | days | 54.74 | 94.13 | 106.81 | 80.67 | 66.05 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.57 + 18.16 – 27.99
= 54.74
The cash conversion cycle of Scotts Miracle-Gro Company has fluctuated over the past five years. In 2024, the company's cash conversion cycle improved significantly to 54.74 days from 94.13 days in 2023. This decrease indicates that the company has been able to more efficiently convert its investments in inventory and receivables into cash during the year.
Comparing the 2024 data to previous years, it is evident that Scotts Miracle-Gro's cash conversion cycle has been quite variable. In 2022, the cash conversion cycle was significantly higher at 106.81 days, indicating a longer time for the company to convert its resources into cash. However, the company managed to reduce this cycle to 80.67 days in 2021 before further improving in 2020 to 66.05 days.
Overall, the decreasing trend in the cash conversion cycle over the past five years suggests that Scotts Miracle-Gro has been more effective in managing its working capital and operational efficiency. This improvement could potentially lead to better liquidity, profitability, and overall financial performance for the company.
Peer comparison
Sep 30, 2024