AAR Corp (AIR)
Cash conversion cycle
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 131.11 | 130.01 | 138.09 | 138.44 | 142.59 | 136.73 | 133.77 | 131.53 | 129.32 | 133.40 | 144.16 | 141.94 | 133.35 | 131.43 | 134.88 | 135.66 | 143.36 | 148.08 | 137.39 | 128.70 |
| Days of sales outstanding (DSO) | days | 64.99 | 63.38 | 66.79 | 68.89 | 64.60 | 56.60 | 58.16 | 66.22 | 60.18 | 62.84 | 60.91 | 62.13 | 57.68 | 56.98 | 54.68 | 54.62 | 52.71 | 55.69 | 45.80 | 40.05 |
| Number of days of payables | days | 49.11 | 46.75 | 51.00 | 47.64 | 46.29 | 46.89 | 43.43 | 47.58 | 35.70 | 37.10 | 37.92 | 47.95 | 37.89 | 34.58 | 31.53 | 37.20 | 33.73 | 47.92 | 46.57 | 38.72 |
| Cash conversion cycle | days | 146.99 | 146.65 | 153.88 | 159.68 | 160.90 | 146.44 | 148.50 | 150.17 | 153.80 | 159.14 | 167.15 | 156.12 | 153.14 | 153.83 | 158.03 | 153.08 | 162.34 | 155.85 | 136.62 | 130.03 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 131.11 + 64.99 – 49.11
= 146.99
The analysis of AAR Corp's cash conversion cycle (CCC) over the period from August 2020 through May 2025 reveals fluctuations and a general trend toward stabilization in recent periods. The CCC peaked at approximately 167.15 days in November 2022, representing the longest duration within the observed timeframe. This indicates a significant period during which cash was tied up in operating cycles, possibly reflecting extended days outstanding in inventory or receivables, or delays in paying suppliers.
For most of the observed period, the CCC remained above 150 days, suggesting a relatively elongated cash cycle that may impact liquidity and operational efficiency. Notably, from February 2024 through May 2025, the CCC shows a decreasing trend, dropping from around 146.65 days to nearly 147 days, indicating a potential improvement in the company's cash management practices. The most recent data points in August and November 2024 show some increase again, nearing 160 days, but the cycle appears to stabilize around that range towards the latest reported period.
Overall, the company's cash conversion cycle demonstrates periods of elongation, with some signs of recent stabilization at a somewhat lower level compared to peak years. These fluctuations could be attributed to changes in inventory management, receivables collection efficiency, or supplier payment terms. Maintaining a shorter CCC generally enhances liquidity and operational flexibility, thus the recent downward trends could be viewed as positive developments.
In summary, AAR Corp's CCC has experienced notable fluctuations over the analyzed period, with recent data suggesting a potential stabilization near approximately 147 to 150 days, reflecting ongoing efforts or external factors influencing the company’s cash conversion efficiency.
Peer comparison
May 31, 2025