Constellation Brands Inc Class A (STZ)

Cash conversion cycle

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	109.32	104.23	94.89	102.50	104.65	100.94	95.55	99.16	98.40	95.14	81.73	86.82	80.77	87.58	87.75	85.23	85.66	84.66	81.78	91.05
Days of sales outstanding (DSO)	days	16.56	17.98	18.76	19.22	18.83	19.13	20.59	19.13	20.41	21.03	21.91	21.02	18.12	21.18	22.91	17.28	21.04	19.80	23.42	19.46
Number of days of payables	days	58.24	53.94	51.20	52.70	51.89	56.47	55.50	52.36	56.24	59.22	51.30	51.75	28.78	46.57	43.01	32.33	34.77	42.15	37.95	35.29
Cash conversion cycle	days	67.65	68.27	62.46	69.02	71.59	63.59	60.64	65.93	62.56	56.95	52.34	56.09	70.11	62.20	67.64	70.18	71.93	62.31	67.25	75.22

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 109.32 + 16.56 – 58.24
= 67.65

The cash conversion cycle of Constellation Brands Inc Class A has shown some fluctuations over the past few periods. The cash conversion cycle, which represents the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales, ranged from a low of 52.34 days to a high of 75.22 days.

On average, the company takes approximately 65 days to complete its cash conversion cycle. This means that it takes Constellation Brands about 65 days to generate cash from its operations after investing in inventory and receiving payments from customers.

A shorter cash conversion cycle is generally more favorable as it indicates efficient management of working capital. It suggests that the company is able to sell its inventory quickly, collect payments promptly, and manage its cash flows effectively.

Overall, it is important for Constellation Brands to closely monitor and manage its cash conversion cycle to ensure efficient working capital management and sustainable financial performance in the long term.