SpartanNash Co (SPTN)
Cash conversion cycle
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 25.47 | 25.47 | 25.27 | 23.80 | 26.07 | 29.28 | 26.72 | 25.33 | 26.20 | 25.67 | 28.45 | 24.96 | 27.70 | 26.19 | 24.94 | 26.89 | 30.01 | 29.22 | 30.73 | 29.07 |
| Days of sales outstanding (DSO) | days | 15.83 | 15.93 | 15.83 | 14.60 | 15.58 | — | 15.97 | 14.78 | — | — | 13.83 | 13.96 | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 20.96 | 22.23 | 21.90 | 19.78 | 22.24 | 23.14 | 23.00 | 21.70 | 23.36 | 21.06 | 20.86 | 21.41 | 23.67 | 23.20 | 24.58 | 20.29 | 23.06 | 20.76 | 20.18 | 18.78 |
| Cash conversion cycle | days | 20.33 | 19.17 | 19.20 | 18.61 | 19.41 | 6.13 | 19.69 | 18.41 | 2.84 | 4.60 | 21.42 | 17.51 | 4.03 | 2.99 | 0.35 | 6.60 | 6.95 | 8.46 | 10.54 | 10.29 |
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 some fluctuations over the period examined. The cycle represents the time it takes for the company to convert its investments in inventory into cash received from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital.
From the data provided, we can observe that there have been significant variations in the cash conversion cycle of SpartanNash Co. The company experienced fluctuations in the range of 0.35 days to 21.42 days during the period under review. It is noteworthy that there was a substantial increase in the cash conversion cycle from 6.13 days to 21.42 days within the span of a few quarters, suggesting potential challenges in managing inventory and collections.
Moreover, the company's cash conversion cycle in recent quarters has been relatively higher compared to prior periods, with durations exceeding 18 days. This could imply potential inefficiencies in inventory management or slower collection of receivables, which may require further analysis and improvement initiatives.
Overall, a thorough investigation into the drivers of the fluctuations in SpartanNash Co's cash conversion cycle is warranted to identify underlying issues and implement strategies to optimize working capital management and enhance cash flow efficiency.
Peer comparison
Dec 31, 2023