Constellation Brands Inc Class A (STZ)

Cash conversion cycle

		Feb 29, 2024	Feb 28, 2023	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020
Days of inventory on hand (DOH)	days	109.32	90.21	98.40	80.83	85.98
Days of sales outstanding (DSO)	days	14.73	16.82	17.82	15.98	18.18
Number of days of payables	days	58.24	44.73	56.24	28.80	34.90
Cash conversion cycle	days	65.81	62.29	59.98	68.01	69.26

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 109.32 + 14.73 – 58.24
= 65.81

The cash conversion cycle for Constellation Brands Inc Class A has shown a fluctuating trend over the past five years. In the most recent fiscal year ending on February 29, 2024, the company's cash conversion cycle was 65.81 days, which represents a slight increase from the previous year. This indicates that the company took slightly longer to convert its investments in inventory and receivables into cash during the year.

Comparing the current cash conversion cycle to the figures from the prior years, we observe that the cycle was relatively lower in the fiscal years ending on February 28, 2022 and February 28, 2023, standing at 59.98 days and 62.29 days, respectively. This suggests that the company was more efficient in managing its working capital and converting its assets into cash during those years.

On the other hand, in the fiscal years ending on February 28, 2021 and February 29, 2020, Constellation Brands Inc Class A had slightly longer cash conversion cycles of 68.01 days and 69.26 days, respectively. This indicates that the company took more time to convert its investments into cash during those years compared to the more recent periods.

Overall, the trend in the cash conversion cycle of Constellation Brands Inc Class A reflects some variability but generally indicates fluctuations in the company's efficiency in managing its working capital and converting it into cash over the past five years. It would be important for the company to focus on optimizing its inventory and accounts receivable management to potentially shorten its cash conversion cycle and improve its overall financial performance.