Applied Industrial Technologies (AIT)
Cash conversion cycle
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.41 | 46.07 | 47.12 | 43.15 | 44.41 |
| Days of sales outstanding (DSO) | days | 59.09 | 58.93 | 63.31 | 58.83 | 51.12 |
| Number of days of payables | days | 24.28 | 27.73 | 27.18 | 24.77 | 21.26 |
| Cash conversion cycle | days | 79.22 | 77.27 | 83.25 | 77.20 | 74.28 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.41 + 59.09 – 24.28
= 79.22
The cash conversion cycle for Applied Industrial Technologies has fluctuated over the past five years. In the most recent fiscal year ending June 30, 2024, the company's cash conversion cycle was 79.22 days, indicating that it takes approximately 79 days for the company to convert its investments in inventory and receivables into cash from sales.
Compared to the previous years, the cash conversion cycle was slightly higher in 2024 but relatively consistent with the levels observed in 2023 and 2021. In 2022, there was a notable increase in the cash conversion cycle, which may suggest inefficiencies in managing inventory and receivables during that period.
Overall, the trend in the cash conversion cycle for Applied Industrial Technologies over the last five years indicates fluctuations, with an average cycle of around 78 days. This metric is important as it reflects the company's ability to efficiently manage its working capital and liquidity by minimizing the time it takes to convert its resources into cash inflows.