The Wendy’s Co (WEN)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1.64 | 1.43 | 1.51 | 1.46 | 1.64 | 1.72 | 1.62 | 1.60 | 1.75 | 1.67 | 1.75 | 1.72 | 1.80 | 1.29 | 1.31 | 1.51 | 1.51 | 1.48 | 1.43 | 1.46 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 1.64 | 1.43 | 1.51 | 1.46 | 1.64 | 1.72 | 1.62 | 1.60 | 1.75 | 1.67 | 1.75 | 1.72 | 1.80 | 1.29 | 1.31 | 1.51 | 1.51 | 1.48 | 1.43 | 1.46 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.64 + — – —
= 1.64
The cash conversion cycle of The Wendy’s Co has shown some fluctuations over the past few years. From the data provided, we can see that the company's cash conversion cycle ranged from a low of 1.29 days in September 2021 to a high of 1.80 days in December 2021.
The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle indicates that the company is managing its working capital efficiently and is able to generate cash quickly. On the other hand, a higher cash conversion cycle can suggest inefficiencies in managing inventory, receivables, and payables.
In the case of The Wendy’s Co, the cash conversion cycle has generally remained relatively low, indicating that the company has been efficient in managing its working capital. However, the fluctuations in the cycle over the years may indicate changes in the company's operating efficiency or management of its working capital components.
Overall, monitoring the cash conversion cycle can provide insights into how effectively a company is managing its cash flow and working capital, which are crucial aspects of financial health and operational efficiency.
Peer comparison
Dec 31, 2024