Agilysys Inc (AGYS)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	7.51	19.08	15.87	2.64	6.42
Days of sales outstanding (DSO)	days	45.13	41.08	56.23	68.41	81.45
Number of days of payables	days	15.42	18.39	22.34	14.24	22.12
Cash conversion cycle	days	37.22	41.77	49.77	56.81	65.74

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.51 + 45.13 – 15.42
= 37.22

The cash conversion cycle of Agilysys Inc has shown a favorable trend over the past five years, decreasing from 65.74 days as of March 31, 2020, to 37.22 days as of March 31, 2024. This indicates that the company has become more efficient in managing its cash flow and working capital.

A shorter cash conversion cycle suggests that Agilysys is taking less time to convert its investments in inventory and accounts receivable into cash from sales, ultimately improving its liquidity position. This trend could be attributed to more effective inventory management, quicker collection of receivables, or optimized payment practices.

Overall, the decreasing trend in the cash conversion cycle is a positive signal for Agilysys Inc, demonstrating improved operational efficiency and potentially leading to better financial performance in the future. It shows that the company is managing its working capital more effectively, which could contribute to sustainable growth and profitability.