The Wendy’s Co (WEN)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1.96 | 2.00 | 1.92 | 1.91 | 2.25 | 2.16 | 2.22 | 2.13 | 2.21 | 1.74 | 1.70 | 1.89 | 1.84 | 1.84 | 1.78 | 1.82 | 1.58 | 1.51 | 1.55 | 1.76 |
| Days of sales outstanding (DSO) | days | 21.24 | 23.14 | 24.10 | — | 20.28 | — | — | — | 23.00 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 8.01 | 12.23 | 11.35 | 13.40 | 13.88 | 11.39 | 12.46 | 11.90 | 15.36 | 10.86 | 12.93 | 11.69 | 12.07 | 7.21 | 8.31 | 9.01 | 9.24 | 10.12 | 7.55 | 8.09 |
| Cash conversion cycle | days | 15.19 | 12.92 | 14.67 | -11.50 | 8.65 | -9.23 | -10.23 | -9.77 | 9.86 | -9.12 | -11.23 | -9.80 | -10.23 | -5.37 | -6.53 | -7.19 | -7.66 | -8.61 | -6.00 | -6.34 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.96 + 21.24 – 8.01
= 15.19
The cash conversion cycle for Wendy's Co has shown variability over the past eight quarters. In Q4 2023, it increased to 10.86 days compared to the previous quarter, indicating a potential slowdown in the company's cash conversion efficiency. This increase follows a trend of fluctuation in the cash conversion cycle, with periods of both increase and decrease observed in the recent quarters.
Compared to the same quarter in the previous year, the Q4 2023 cash conversion cycle has increased significantly from 2.88 days to 10.86 days, suggesting a possible deterioration in the company's ability to efficiently convert its investments in inventory and accounts receivable into cash.
Overall, it is essential for Wendy's Co to closely monitor and manage its cash conversion cycle to ensure optimal working capital management and liquidity in the future quarters.
Peer comparison
Dec 31, 2023