Winnebago Industries Inc (WGO)
Cash conversion cycle
| Aug 31, 2024 | Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 55.68 | 53.70 | 43.81 | 38.66 | 29.65 |
| Days of sales outstanding (DSO) | days | 23.36 | 19.90 | 18.87 | 25.77 | 34.77 |
| Number of days of payables | days | 18.36 | 16.76 | 18.12 | 20.38 | 21.47 |
| Cash conversion cycle | days | 60.67 | 56.84 | 44.56 | 44.05 | 42.94 |
August 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.68 + 23.36 – 18.36
= 60.67
The trend in Winnebago Industries Inc's cash conversion cycle over the past five years shows a general increase in the time it takes to convert its investments in inventory and accounts receivable into cash. The cash conversion cycle has risen from 42.94 days in August 2020 to 60.67 days in August 2024.
This suggests that the company is taking longer to sell its inventory, collect payments from customers, and convert those receivables into cash. A longer cash conversion cycle could indicate inefficiencies in inventory management, slow collection of receivables, or challenges in managing working capital effectively.
It would be advisable for Winnebago Industries Inc to investigate the reasons behind the lengthening of the cash conversion cycle and implement strategies to improve efficiency in managing its working capital. This may involve optimizing inventory levels, streamlining the accounts receivable process, and ensuring timely collection of payments to enhance cash flow and overall financial performance.
Peer comparison
Aug 31, 2024