United Natural Foods Inc (UNFI)
Cash conversion cycle
| Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Aug 1, 2020 | Aug 3, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 31.94 | 34.66 | 35.57 | 36.44 | 40.85 |
| Days of sales outstanding (DSO) | days | 11.00 | 15.60 | 15.27 | 15.81 | 17.96 |
| Number of days of payables | days | 24.82 | 25.64 | 26.03 | 26.10 | 28.57 |
| Cash conversion cycle | days | 18.12 | 24.62 | 24.81 | 26.16 | 30.24 |
July 29, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.94 + 11.00 – 24.82
= 18.12
The cash conversion cycle (CCC) of United Natural Foods Inc. has shown a positive trend, decreasing from 30.21 days in 2019 to 17.85 days in 2023. This indicates that the company has been managing its cash, inventory, and receivables more efficiently over time.
A lower CCC suggests that the company is taking less time to convert its investments in inventory and other resources into cash. This can be a positive sign of effective working capital management and operational efficiency. It may also indicate that the company is able to collect receivables more quickly and manage its inventory levels more effectively.
The improvement in the CCC over the years could suggest that United Natural Foods Inc. has been streamlining its operations or implementing more effective inventory and cash management strategies. This could potentially result in improved liquidity and profitability for the company.
Overall, the decreasing trend in the cash conversion cycle reflects positively on United Natural Foods Inc.’s ability to efficiently manage its working capital and convert its resources into cash, indicating sound financial management.
Peer comparison
Jul 29, 2023