Tractor Supply Company (TSCO)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 103.54 | 107.72 | 101.70 | 117.75 | 107.12 | 111.23 | 105.28 | 111.42 | 96.90 | 51.21 | 47.21 | 50.35 | 44.58 | 108.77 | 101.75 | 124.87 | 106.75 | 121.47 | 117.46 | 129.65 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 46.17 | 53.67 | 48.64 | 59.31 | 55.28 | 50.65 | 54.25 | 58.21 | 51.10 | 27.88 | 28.95 | 28.55 | 24.40 | 60.03 | 60.48 | 58.18 | 42.83 | 45.55 | 46.19 | 54.10 |
| Cash conversion cycle | days | 57.37 | 54.05 | 53.06 | 58.44 | 51.84 | 60.58 | 51.03 | 53.21 | 45.79 | 23.32 | 18.26 | 21.81 | 20.18 | 48.74 | 41.26 | 66.70 | 63.92 | 75.92 | 71.27 | 75.55 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.54 + — – 46.17
= 57.37
Tractor Supply Company's cash conversion cycle has shown fluctuations over the past five years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
In the most recent quarter of December 2023, the cash conversion cycle was 57.37 days, showing a slight increase from the previous quarter. This suggests that Tractor Supply Company took longer to convert its resources into cash during this period.
Looking back at historical data, there have been periods of shorter cash conversion cycles, such as in June 2021 when it was only 18.26 days. This indicates that Tractor Supply was more efficient in managing its working capital and converting inventory into sales during that period.
On the other hand, there have been instances of longer cash conversion cycles, such as in March 2019 when it reached 75.92 days. This could imply possible inefficiencies in the company's working capital management, leading to delays in converting resources into cash.
Overall, fluctuations in the cash conversion cycle suggest changes in Tractor Supply Company's efficiency in managing working capital and converting investments into cash. It is essential for the company to continually monitor and improve its cash conversion cycle to optimize its financial performance and liquidity position.
Peer comparison
Dec 31, 2023