Winnebago Industries Inc (WGO)
Cash conversion cycle
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.70 | 43.81 | 38.66 | 29.65 | 43.74 |
| Days of sales outstanding (DSO) | days | 19.90 | 18.87 | 25.77 | 34.77 | 29.05 |
| Number of days of payables | days | 16.76 | 18.12 | 20.38 | 21.47 | 17.75 |
| Cash conversion cycle | days | 56.84 | 44.56 | 44.05 | 42.94 | 55.04 |
August 26, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.70 + 19.90 – 16.76
= 56.84
Winnebago Industries, Inc.'s cash conversion cycle has shown fluctuations over the past five years. 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.
From 2019 to 2023, there has been variability in the company's cash conversion cycle, with the cycle peaking in 2019 at 55.04 days and then decreasing in 2021 to 45.30 days. However, in 2023, the cycle increased to 59.34 days, reflecting a decline in the efficiency of the company's working capital management.
An increasing cash conversion cycle could indicate that the company is taking longer to sell its inventory or collect receivables, which may impact its liquidity. Conversely, a declining cycle could suggest improvements in inventory management and collection of receivables, leading to more efficient use of working capital and potentially better cash flow.
It is important for Winnebago Industries to closely monitor its cash conversion cycle and work towards optimizing operational processes to ensure efficient working capital management and healthy cash flows.
Peer comparison
Aug 26, 2023