Avnet Inc (AVT)
Cash conversion cycle
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 95.09 | 96.27 | 99.10 | 91.49 | 85.41 | 84.19 | 78.29 | 75.84 | 72.57 | 66.07 | 68.03 | 66.54 | 68.32 | 61.44 | 64.90 | 68.50 | 64.04 | 62.74 | 65.31 | 66.27 |
| Days of sales outstanding (DSO) | days | 67.47 | 63.64 | 64.26 | 65.39 | 65.52 | — | 66.40 | — | 64.58 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 58.17 | 55.64 | 53.60 | 54.78 | 52.73 | 49.33 | 48.91 | 56.48 | 58.68 | 53.29 | 51.73 | 50.01 | 50.68 | 44.56 | 44.60 | 46.64 | 41.12 | 39.62 | 40.47 | 44.36 |
| Cash conversion cycle | days | 104.39 | 104.28 | 109.76 | 102.10 | 98.21 | 34.87 | 95.78 | 19.36 | 78.47 | 12.78 | 16.30 | 16.54 | 17.63 | 16.88 | 20.30 | 21.85 | 22.92 | 23.12 | 24.84 | 21.91 |
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 shown fluctuations over the period analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From December 2019 to March 2020, the company experienced an increase in its cash conversion cycle, indicating a longer time to convert investments into cash. This trend continued until December 2020 when the cycle peaked at 24.84 days, reflecting potential inefficiencies in managing inventory and collecting accounts receivable.
From March 2021 to March 2023, there was a significant improvement in the cash conversion cycle, with the company reducing the cycle time to as low as 12.78 days in June 2022. This demonstrated effective management in inventory, accounts receivable, and accounts payable.
However, from September 2022 to December 2023, the cash conversion cycle increased again, reaching a peak of 109.76 days in December 2023. This suggests potential challenges in efficiently managing the company's working capital and liquidity.
The latest data available indicates a slightly improved cash conversion cycle compared to the previous quarter, standing at 104.39 days as of June 30, 2024. It is crucial for Avnet Inc to closely monitor and manage its cash conversion cycle to optimize working capital, improve cash flow efficiency, and enhance overall financial performance.
Peer comparison
Jun 30, 2024