Aspen Technology Inc (AZPN)

Cash conversion cycle

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022
Days of inventory on hand (DOH)	days	—	11.16	—
Days of sales outstanding (DSO)	days	37.40	42.92	96.84
Number of days of payables	days	7.73	19.83	39.10
Cash conversion cycle	days	29.67	34.25	57.74

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 37.40 – 7.73
= 29.67

The cash conversion cycle of Aspen Technology Inc has shown improvement over the past three years. In June 2022, the cash conversion cycle was at its highest at 57.74 days, indicating a longer period for the company to convert its investments in inventory and other resources into cash flows from sales. By June 2023, the cash conversion cycle had decreased to 34.25 days, showing a positive trend towards more efficient working capital management.

Moreover, by June 2024, Aspen Technology Inc further improved its cash conversion cycle to 29.67 days, reflecting an even more efficient cycle in converting its assets into cash. This indicates that the company has been able to streamline its operations, manage its inventory efficiently, and collect receivables promptly, resulting in quicker cash flows generation.

Overall, the decreasing trend in Aspen Technology Inc's cash conversion cycle over the years suggests improving liquidity and operational efficiency, which is a positive indicator of the company's working capital management.