Atmos Energy Corporation (ATO)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	32.54	61.79	77.64	62.95	62.02
Days of sales outstanding (DSO)	days	33.32	29.25	32.63	36.74	29.83
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	65.86	91.04	110.27	99.69	91.85

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.54 + 33.32 – —
= 65.86

The cash conversion cycle of Atmos Energy Corporation improved steadily over the past five years. In fiscal year 2024, the company's cash conversion cycle was 65.86 days, significantly lower than the 91.04 days in 2023 and the highest of 110.27 days in 2022. This indicates that Atmos Energy has become more efficient in managing its working capital and converting its resources into cash.

A lower cash conversion cycle suggests that the company is taking less time to convert its investments in inventory and accounts receivable into cash from sales. This could be attributed to improved inventory management, faster collection of receivables, or better cash flow management practices within the organization.

Overall, the decreasing trend in the cash conversion cycle reflects positively on the liquidity and operational efficiency of Atmos Energy Corporation, demonstrating the company's ability to effectively manage its working capital and generate cash flows from its core operational activities.