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Wal-Mart Stores Inc  (NYSE:WMT) Cash Conversion Cycle: 5.00 (As of Jul. 2017)

Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

Wal-Mart Stores Inc's Days Sales Outstanding for the three months ended in Jul. 2017 was 3.99.
Wal-Mart Stores Inc's Days Inventory for the three months ended in Jul. 2017 was 43.27.
Wal-Mart Stores Inc's Days Payable for the three months ended in Jul. 2017 was 42.26.
Therefore, Wal-Mart Stores Inc's Cash Conversion Cycle (CCC) for the three months ended in Jul. 2017 was 5.00.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Wal-Mart Stores Inc Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
Cash Conversion Cycle Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.60 12.17 11.68 10.64 6.73

Wal-Mart Stores Inc Quarterly Data

Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17
Cash Conversion Cycle Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.94 8.74 5.99 5.00 3.55

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

Wal-Mart Stores Inc's Cash Conversion Cycle for the fiscal year that ended in Jan. 2017 is calculated as

Cash Conversion Cycle=Days Sales Outstanding +Days Inventory-Days Payable
=4.38+44.21-41.86
=6.73

Wal-Mart Stores Inc's Cash Conversion Cycle for the quarter that ended in Jul. 2017 is calculated as:

Cash Conversion Cycle=Days Sales Outstanding+Days Inventory-Days Payable
=3.99+43.27-42.26
=5.00

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.


Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.


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