United Natural Foods Inc (UNFI)
Cash conversion cycle
| Aug 3, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Aug 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 29.59 | 31.94 | 34.66 | 35.57 | 36.44 |
| Days of sales outstanding (DSO) | days | 11.67 | 11.00 | 15.60 | 15.27 | 15.81 |
| Number of days of payables | days | 22.93 | 24.82 | 25.64 | 26.03 | 26.10 |
| Cash conversion cycle | days | 18.34 | 18.12 | 24.62 | 24.81 | 26.16 |
August 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.59 + 11.67 – 22.93
= 18.34
The cash conversion cycle of United Natural Foods Inc has shown a gradual improvement over the past five years. In the most recent fiscal year ending on August 3, 2024, the company's cash conversion cycle was 18.34 days, which indicates that on average, it takes United Natural Foods Inc approximately 18.34 days to convert its investments in inventory and accounts receivable back into cash.
Comparing this figure with the prior year, there was a slight increase from 18.12 days to 18.34 days. Nevertheless, this small change does not suggest any significant deterioration in the efficiency of the company's working capital management.
Furthermore, examining the trend over the past five years, it is evident that the cash conversion cycle has decreased significantly from 26.16 days in 2020 to 18.34 days in 2024. This trend indicates that United Natural Foods Inc has been able to streamline its operations to reduce the time it takes to convert its assets into cash.
Overall, a shorter cash conversion cycle suggests that the company is able to efficiently manage its working capital, which can lead to improved liquidity and financial performance. United Natural Foods Inc's downward trend in the cash conversion cycle is a positive indication of its effective working capital management in recent years.
Peer comparison
Aug 3, 2024