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