AeroVironment Inc (AVAV)
Cash conversion cycle
| Apr 30, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 30, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | Apr 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | Apr 30, 2020 | Jul 27, 2019 | Apr 30, 2019 | Oct 27, 2018 | Jul 28, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 96.68 | 75.57 | 88.87 | 88.43 | 71.06 | 102.24 | 93.64 | 84.89 | 77.34 | 77.64 | 79.76 | 98.06 | 84.75 | 76.02 | 60.93 | 62.65 | 97.17 | 94.03 | 94.93 | 87.87 |
| Days of sales outstanding (DSO) | days | 137.64 | 108.70 | 123.82 | 116.66 | 130.79 | 126.08 | 105.29 | 107.11 | 124.02 | 126.76 | 121.66 | 113.87 | 108.59 | 91.90 | — | 142.46 | 101.55 | 86.98 | 90.72 | 85.13 |
| Number of days of payables | days | 31.09 | 12.63 | 14.10 | 14.53 | 16.05 | 21.45 | 22.44 | 18.89 | 16.42 | 13.10 | 20.87 | 20.86 | 29.39 | 20.88 | 15.71 | 27.32 | 19.75 | 27.78 | 29.14 | 26.91 |
| Cash conversion cycle | days | 203.22 | 171.64 | 198.59 | 190.55 | 185.80 | 206.87 | 176.49 | 173.11 | 184.93 | 191.30 | 180.55 | 191.08 | 163.96 | 147.03 | 45.22 | 177.78 | 178.97 | 153.23 | 156.51 | 146.09 |
April 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 96.68 + 137.64 – 31.09
= 203.22
The cash conversion cycle of AeroVironment Inc has shown fluctuating trends over the past few years. The cycle represents the time taken for the company to convert its investments in inventory into cash receipts from customers.
Analyzing the data provided, we can observe that the cash conversion cycle has ranged from a low of 45.22 days to a high of 206.87 days over the period. A lower number indicates that the company is efficiently managing its working capital by quickly converting inventory into cash.
The company experienced a significant increase in the cash conversion cycle from April 2020 to July 2023, reaching a peak of 206.87 days in January 2023. This suggests potential challenges in managing inventory levels or delays in collecting cash from customers during this period.
However, there was a noticeable improvement in the cycle from July 2023 onwards with a downward trend, indicating enhanced efficiency in managing working capital. The latest reported cycle of 203.22 days in April 2024 reflects a slight increase compared to the previous quarter, which may warrant further monitoring to ensure sustainable working capital management practices.
Overall, AeroVironment Inc's cash conversion cycle has shown variability but appears to be moving towards optimization in recent periods. Monitoring this metric will be crucial for assessing the company's effectiveness in managing its cash flow and working capital efficiency.
Peer comparison
Apr 30, 2024