SpartanNash Co (SPTN)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 25.47 | 25.59 | 25.33 | 24.96 | 26.89 |
| Days of sales outstanding (DSO) | days | 15.83 | 15.29 | 14.78 | 13.96 | 14.77 |
| Number of days of payables | days | 20.96 | 21.83 | 21.70 | 21.41 | 20.29 |
| Cash conversion cycle | days | 20.33 | 19.05 | 18.41 | 17.51 | 21.36 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.47 + 15.83 – 20.96
= 20.33
The cash conversion cycle of SpartanNash Co has shown a fluctuating trend over the past five years. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash received from sales.
In 2023, the cash conversion cycle increased to 20.33 days from 19.05 days in 2022, indicating a slight deterioration in the company's efficiency in managing its working capital. However, compared to 2021 and 2020, the cycle has generally lengthened, suggesting a potential issue with inventory management or collection of receivables.
The peak in the cash conversion cycle was observed in 2019 at 21.36 days, which may have been influenced by factors such as inventory turnover rates and payment terms with suppliers and customers. Overall, SpartanNash Co should focus on optimizing its cash conversion cycle to improve liquidity and operational efficiency in the coming years.
Peer comparison
Dec 31, 2023