Walgreens Boots Alliance Inc (WBA)
Cash conversion cycle
Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 19.14 | 23.42 | 20.11 | 20.28 | 22.26 | 24.08 | 22.70 | 23.28 | 24.47 | 26.07 | 21.81 | 29.59 | 28.80 | 36.80 | 26.89 | 24.86 | 26.03 | 28.73 | 25.63 | 28.65 |
Days of sales outstanding (DSO) | days | 15.67 | 15.33 | 14.06 | 15.60 | 15.61 | 13.33 | 13.82 | 13.68 | 14.37 | 16.20 | 15.13 | 13.72 | 12.89 | 20.35 | 18.71 | 18.42 | 20.00 | 19.82 | 19.35 | 19.45 |
Number of days of payables | days | 28.57 | 33.68 | 30.77 | 29.88 | 32.34 | 31.47 | 30.58 | 32.23 | 30.58 | 34.26 | 29.76 | 40.09 | 37.13 | 53.37 | 34.45 | 36.48 | 40.36 | 42.00 | 39.39 | 41.00 |
Cash conversion cycle | days | 6.24 | 5.07 | 3.40 | 6.00 | 5.54 | 5.94 | 5.94 | 4.73 | 8.27 | 8.01 | 7.17 | 3.22 | 4.57 | 3.79 | 11.15 | 6.80 | 5.66 | 6.56 | 5.59 | 7.10 |
February 29, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.14 + 15.67 – 28.57
= 6.24
The cash conversion cycle of Walgreens Boots Alliance Inc has displayed some fluctuations over the periods analyzed. It provides insights into the efficiency of the company's working capital management.
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and generate cash quickly from its operational activities.
On Feb 29, 2024, the cash conversion cycle stood at 6.24 days, increasing from the previous period on Nov 30, 2023, where it was 5.07 days. This suggests a slight decrease in efficiency in converting inventory into cash during this period.
The lowest cash conversion cycle observed was on Aug 31, 2023, at 3.40 days, indicating a more efficient use of working capital and quicker cash flow generation from sales during that period.
On May 31, 2020, the cash conversion cycle spiked to 11.15 days, signaling a potential inefficiency in working capital management, possibly due to inventory issues or delays in collecting receivables.
Overall, Walgreens Boots Alliance Inc should aim to maintain a lower cash conversion cycle to optimize its working capital efficiency and ensure a steady flow of cash from its operational activities. Tracking this metric over time can provide valuable insights into the company's financial health and operational performance.
Peer comparison
Feb 29, 2024
See also:
Walgreens Boots Alliance Inc Cash Conversion Cycle (Quarterly Data)