American Woodmark Corporation (AMWD)
Cash conversion cycle
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 39.51 | 40.74 | 51.09 | 40.60 | 30.50 |
| Days of sales outstanding (DSO) | days | 23.23 | 21.05 | 30.85 | 30.74 | 28.15 |
| Number of days of payables | days | 16.01 | 13.65 | 24.94 | 23.52 | 17.22 |
| Cash conversion cycle | days | 46.73 | 48.13 | 57.00 | 47.82 | 41.43 |
April 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.51 + 23.23 – 16.01
= 46.73
The cash conversion cycle of American Woodmark Corporation has fluctuated over the past five years. In April 2024, the company's cash conversion cycle was 46.73 days, showing an improvement from the previous year's cycle of 48.13 days. This indicates that the company was able to more efficiently convert its investments in inventory and accounts receivable into cash within a shorter timeframe.
Comparing the current cycle to the cycles in 2022 and 2021, we see a general trend of decreasing days required to convert its resources into cash. However, in April 2022, the company experienced a peak cycle of 57.00 days, suggesting potential challenges in managing inventory and collecting receivables efficiently.
In contrast, in 2019, American Woodmark Corporation had a relatively shorter cash conversion cycle of 41.43 days, indicating a more effective cash management process in that year.
Overall, the fluctuations in the cash conversion cycle may reflect changes in the company's operational efficiency, working capital management practices, and market conditions over the years. Further analysis and comparison with industry benchmarks can provide insights into the company's cash flow dynamics and overall financial health.