Unifirst Corporation (UNF)
Cash conversion cycle
| Aug 31, 2024 | May 25, 2024 | Feb 24, 2024 | Nov 25, 2023 | Aug 26, 2023 | Feb 25, 2023 | Nov 26, 2022 | Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 36.25 | 37.03 | 36.79 | 35.47 | 36.55 | 39.47 | 38.77 | 42.32 | 43.99 | 48.48 | 49.09 | 45.92 | 39.12 | 35.46 | 33.13 | 33.30 | 31.93 | 29.57 | 31.63 | 32.33 |
| Days of sales outstanding (DSO) | days | 41.80 | 42.82 | 45.03 | 47.15 | 45.48 | 47.62 | 48.31 | 45.40 | 45.10 | 45.45 | 45.64 | 41.58 | 40.77 | 42.00 | 42.82 | 38.50 | 39.25 | 40.96 | 43.15 | 40.91 |
| Number of days of payables | days | 21.37 | 19.78 | 20.06 | 20.62 | 22.85 | 21.07 | 23.04 | 22.95 | 23.29 | 25.47 | 24.19 | 26.02 | 22.61 | 19.60 | 19.11 | 20.06 | 17.63 | 22.18 | 22.64 | 24.97 |
| Cash conversion cycle | days | 56.68 | 60.06 | 61.76 | 62.00 | 59.18 | 66.02 | 64.04 | 64.76 | 65.80 | 68.46 | 70.53 | 61.48 | 57.28 | 57.87 | 56.85 | 51.74 | 53.55 | 48.35 | 52.15 | 48.28 |
August 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.25 + 41.80 – 21.37
= 56.68
The cash conversion cycle for Unifirst Corporation has been fluctuating over the past couple of years, with the cycle ranging from 48.28 days to 70.53 days. The company's ability to convert its investments in inventory into cash flow during a specific period can be analyzed through the cash conversion cycle. A shorter cycle indicates that the company is efficient in managing its working capital and can quickly turn inventory into sales and eventually cash.
In recent periods, notably from May 2021 to May 2022, there has been a rising trend in the cash conversion cycle for Unifirst Corporation. This trend peaked in August 2022 at 70.53 days, indicating a potential delay in converting inventory and accounts receivable into cash. However, there was a slight improvement in the cycle towards the end of the observed period, with a drop to 48.28 days in November 2019. This could suggest that the company has made efforts to streamline its operations and improve its working capital efficiency.
Overall, Unifirst Corporation should continue monitoring and improving its cash conversion cycle to ensure effective management of working capital, optimize cash flow, and enhance overall financial performance.
Peer comparison
Aug 31, 2024