Apple Inc (AAPL)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	11.25	9.67	7.26	10.22	7.82
Days of sales outstanding (DSO)	days	61.83	58.68	56.82	51.77	50.31
Number of days of payables	days	106.45	95.59	94.12	85.07	81.48
Cash conversion cycle	days	-33.37	-27.25	-30.04	-23.09	-23.34

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.25 + 61.83 – 106.45
= -33.37

The cash conversion cycle of Apple Inc has shown a fluctuating trend over the past five years. In the most recent fiscal year ending September 30, 2024, the company's cash conversion cycle was recorded at -33.37 days, indicating that Apple was able to convert its invested cash back into more cash, in a shorter amount of time. This represents a deterioration compared to the previous year when the cycle was -27.25 days.

Despite the recent increase, the cash conversion cycle has generally been in negative territory over the past five years, implying that Apple's operations have been efficient in generating cash inflows quickly relative to cash outflows. However, it is important to note that negative cash conversion cycle values could also suggest the company is holding excessive cash, leading to suboptimal utilization of resources.

In comparison to the cycle in 2021 and 2020, where the values were -23.09 days and -23.34 days respectively, there has been a slight increase in the number of days taken to convert cash in the most recent fiscal year.

Overall, while Apple has historically maintained a negative cash conversion cycle, indicating efficient management of cash flows, the recent increase in the cycle warrants monitoring to ensure continued effectiveness in managing working capital.