Unifirst Corporation (UNF)
Cash conversion cycle
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 36.55 | 42.32 | 45.92 | 33.30 | 32.33 |
| Days of sales outstanding (DSO) | days | 45.48 | 45.40 | 41.58 | 38.49 | 40.84 |
| Number of days of payables | days | 22.85 | 22.95 | 26.02 | 20.06 | 24.96 |
| Cash conversion cycle | days | 59.18 | 64.76 | 61.48 | 51.72 | 48.21 |
August 26, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.55 + 45.48 – 22.85
= 59.18
The cash conversion cycle of Unifirst Corp. has shown fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A longer cash conversion cycle typically indicates that a company's operating efficiency is decreasing.
In the most recent year, the cash conversion cycle was 59.32 days, down from 64.83 days in the previous year. This suggests that Unifirst Corp. was able to convert its resources into cash more efficiently. However, compared to the cycle of 48.41 days in 2019, the current cycle still indicates a longer period required to convert resources to cash.
Overall, the trend in the cash conversion cycle of Unifirst Corp. has shown some variability, with a peak in 2019 and a slight improvement in the most recent year. Further analysis of the company's management of inventory, accounts receivable, and accounts payable may provide insights into the factors driving these fluctuations.
Peer comparison
Aug 26, 2023