Accenture plc (ACN)

Cash conversion cycle

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	64.29	64.80	60.86	63.21	63.57	65.60	62.13	66.25	66.58	68.15	63.54	65.75	63.82	63.65	59.22	62.90	63.64	65.65	63.07	64.55
Number of days of payables	days	15.41	17.77	17.36	16.75	17.54	17.47	18.73	18.00	17.72	18.62	20.42	18.00	17.99	16.96	16.23	16.78	18.15	19.04	20.10	19.31
Cash conversion cycle	days	48.88	47.03	43.50	46.46	46.03	48.13	43.40	48.26	48.87	49.53	43.12	47.76	45.82	46.69	42.99	46.12	45.49	46.61	42.97	45.24

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 64.29 – 15.41
= 48.88

The cash conversion cycle for Accenture plc has fluctuated over the past few quarters, ranging from a low of 42.99 days to a high of 49.53 days. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales, and then back into cash with the payment of accounts receivable.

A longer cash conversion cycle suggests that the company takes more time to turn its investments into cash, which could indicate inefficiencies in working capital management. On the other hand, a shorter cash conversion cycle indicates that the company is able to quickly convert its investments into cash, which is generally a positive indicator of efficient operations.

In the case of Accenture plc, the fluctuation in the cash conversion cycle over the periods analyzed could be due to various factors such as changes in inventory management, payment terms with customers, or collections efficiency. Analyzing trends and identifying the underlying reasons for these fluctuations can provide insights into the company's working capital management practices and overall operational efficiency.