Agilent Technologies Inc (A)

Cash conversion cycle

Oct 31, 2024 Oct 31, 2023 Oct 31, 2022 Oct 31, 2021 Oct 31, 2020
Days of inventory on hand (DOH) days 74.77 68.62 75.97 63.43 60.66
Days of sales outstanding (DSO) days 82.21 74.84 80.39 72.46 78.04
Number of days of payables days 41.54 27.82 42.45 34.09 29.83
Cash conversion cycle days 115.44 115.64 113.91 101.81 108.88

October 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.77 + 82.21 – 41.54
= 115.44

The cash conversion cycle for Agilent Technologies Inc has shown a fluctuating trend over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash collected from sales.

In 2024, the cash conversion cycle increased slightly to 115.44 days compared to the previous year, indicating a slight delay in converting resources into cash. This may signal potential challenges in managing inventory or accounts receivable efficiently.

In 2023, the cycle remained relatively stable at 115.64 days, suggesting a consistent performance in managing working capital. However, the cycle in 2022 was slightly lower at 113.91 days, indicating a quicker conversion of resources into cash compared to the preceding year.

The cash conversion cycle significantly improved in 2021, dropping to 101.81 days, suggesting more efficient management of working capital and quicker conversion of investments into cash. This could be attributed to effective inventory and accounts receivable management strategies implemented during that year.

In contrast, in 2020, the cash conversion cycle increased to 108.88 days, indicating a longer time taken to convert resources into cash compared to the previous year. This could be a result of challenges in managing working capital efficiently during that period.

Overall, Agilent Technologies Inc should focus on maintaining or improving the efficiency of its cash conversion cycle by closely monitoring inventory levels, optimizing accounts receivable collection processes, and ensuring timely payment of accounts payable.


Peer comparison

Oct 31, 2024

Company name
Symbol
Cash conversion cycle
Agilent Technologies Inc
A
115.44
Cohu Inc
COHU
88.39
Itron Inc
ITRI
67.90
Teradyne Inc
TER
99.16
Veralto Corporation
VLTO
59.13