Adtalem Global Education Inc (ATGE)

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	—	0.38	—	—	—
Days of sales outstanding (DSO)	days	29.21	25.85	21.56	27.60	36.67
Number of days of payables	days	27.29	22.65	15.40	16.00	18.35
Cash conversion cycle	days	1.92	3.58	6.16	11.60	18.32

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 29.21 – 27.29
= 1.92

The cash conversion cycle of Adtalem Global Education Inc has shown a consistent improvement over the last five years. As of June 30, 2024, the company's cash conversion cycle stands at 1.92 days, indicating a significant efficiency in its cash management compared to previous years.

In the earlier years, the cash conversion cycle was notably longer, with figures of 3.58 days in 2023, 6.16 days in 2022, 11.60 days in 2021, and 18.32 days in 2020. This trend suggests that Adtalem Global Education Inc has been successful in optimizing its working capital management processes, leading to a quicker conversion of its investments in inventory and accounts receivable into cash.

A declining cash conversion cycle is generally a positive indicator, as it signifies that the company is able to generate cash more rapidly from its operations. Adtalem Global Education Inc's improving cash conversion cycle reflects enhanced efficiency in managing its inventory levels, collecting receivables, and paying its obligations, which can contribute to overall liquidity and financial health.