ABM Industries Incorporated (ABM)
Cash conversion cycle
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 3.73 | 4.17 | 5.31 | 5.06 | 4.02 | 4.62 | 5.24 | 4.96 | 5.38 | 5.53 | 5.85 | 5.44 | 5.29 | 5.72 | 4.28 | 4.34 | 4.36 | 5.82 | 5.76 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 11.45 | 14.20 | 14.55 | 12.63 | 13.53 | 15.44 | 15.27 | 14.04 | 14.75 | 17.54 | 14.17 | 14.69 | 13.91 | 16.93 | 13.25 | 14.22 | 13.99 | 16.16 | 19.19 | 17.99 |
| Cash conversion cycle | days | -11.45 | -10.47 | -10.38 | -7.32 | -8.48 | -11.42 | -10.65 | -8.80 | -9.79 | -12.17 | -8.63 | -8.83 | -8.47 | -11.64 | -7.53 | -9.94 | -9.65 | -11.80 | -13.37 | -12.23 |
January 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 11.45
= -11.45
The cash conversion cycle for ABM Industries Inc. has been relatively stable over the past eight quarters, ranging from 63.33 days to 67.81 days. This metric measures the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
ABM Industries Inc.'s cash conversion cycle averaged around 66 days, indicating that on average, it takes the company approximately 66 days to turn investments in inventory into cash receipts from customers. A longer cash conversion cycle may suggest inefficiencies in managing inventory or collecting accounts receivable, potentially tying up capital and impacting liquidity.
Although the slight variations in the cash conversion cycle are normal for most companies and industries, ABM Industries Inc. should continue to monitor this metric closely and strive to optimize its working capital management to ensure efficient operations and maintain healthy cash flows.
Peer comparison
Jan 31, 2024