US Foods Holding Corp (USFD)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 16.72 | 17.46 | 20.94 | 19.96 | 20.45 |
| Days of sales outstanding (DSO) | days | 19.19 | 18.35 | 18.33 | 17.46 | 20.62 |
| Number of days of payables | days | 21.44 | 20.04 | 20.65 | 19.10 | 20.85 |
| Cash conversion cycle | days | 14.48 | 15.77 | 18.63 | 18.32 | 20.22 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 16.72 + 19.19 – 21.44
= 14.48
The cash conversion cycle of US Foods Holding Corp has shown a decreasing trend over the past five years, indicating improved efficiency in managing its cash flow and working capital. In 2023, the company's cash conversion cycle was the lowest at 14.48 days, a significant improvement from the cycle of 20.22 days in 2019.
A shorter cash conversion cycle suggests that the company is able to convert its investments in inventory into cash more quickly, thereby reducing the time it takes to recoup the costs associated with producing goods and services. This efficiency can lead to improved liquidity and profitability for the company.
Overall, the decreasing trend in US Foods Holding Corp's cash conversion cycle reflects the company's efforts to streamline its operations and optimize its working capital management over the years.
Peer comparison
Dec 31, 2023