Avnet Inc (AVT)
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 | 95.09 | 85.41 | 72.57 | 68.32 | 64.04 |
| Days of sales outstanding (DSO) | days | 67.47 | 65.52 | 64.58 | 66.82 | 75.18 |
| Number of days of payables | days | 58.17 | 52.73 | 58.68 | 50.68 | 41.12 |
| Cash conversion cycle | days | 104.39 | 98.21 | 78.47 | 84.45 | 98.10 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.09 + 67.47 – 58.17
= 104.39
The cash conversion cycle of Avnet Inc has fluctuated over the past five years. In 2024, the company's cash conversion cycle increased to 104.39 days from 98.21 days in 2023. This indicates that it took Avnet Inc longer to convert its resources into cash in 2024 compared to the previous year.
Looking back at the trend, the cash conversion cycle was at its lowest in 2022, standing at 78.47 days. This implies that the company was more efficient in managing its cash cycle in that year. However, in 2021 and 2020, the cash conversion cycle was higher at 84.45 days and 98.10 days respectively, suggesting that Avnet Inc took longer to convert its investments in inventory and accounts receivable into cash during those years.
Overall, it is important for Avnet Inc to assess the drivers behind these fluctuations in its cash conversion cycle to identify areas for improvement in its working capital management and operational efficiency.
Peer comparison
Jun 30, 2024