AZZ Incorporated (AZZ)
Cash conversion cycle
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 20.82 | 39.75 | 42.55 | 45.10 | 51.11 | 61.00 | 80.78 | 159.50 | 100.43 | 176.06 | 128.70 | 101.77 | 94.81 | 49.27 | 46.15 | 49.12 | 44.19 | 55.21 | 53.29 | 57.69 |
| Days of sales outstanding (DSO) | days | 21.27 | 42.00 | 44.78 | 41.28 | 50.58 | 56.64 | 80.43 | 154.67 | 97.35 | 78.47 | 63.67 | 58.68 | 57.01 | 52.37 | 43.77 | 48.14 | 47.85 | 62.56 | 58.28 | 60.92 |
| Number of days of payables | days | 15.57 | 29.84 | 39.73 | 33.38 | 29.92 | 46.98 | 89.65 | 156.33 | 19.78 | 69.88 | 54.07 | 49.72 | 42.39 | 28.23 | 22.71 | 21.68 | 27.44 | 33.21 | 31.76 | 29.49 |
| Cash conversion cycle | days | 26.52 | 51.90 | 47.61 | 53.00 | 71.77 | 70.66 | 71.56 | 157.85 | 178.00 | 184.65 | 138.30 | 110.72 | 109.43 | 73.41 | 67.21 | 75.58 | 64.61 | 84.56 | 79.81 | 89.12 |
February 29, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 20.82 + 21.27 – 15.57
= 26.52
AZZ Incorporated's cash conversion cycle has shown fluctuations over the past few quarters. The cash conversion cycle is calculated by adding the days inventory outstanding to the days sales outstanding and subtracting the days payable outstanding. This cycle measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales.
In the most recent quarter, as of Feb 29, 2024, the cash conversion cycle improved significantly to 26.52 days compared to the previous quarter where it was 51.90 days. This improvement could indicate more efficient management of inventory and collections, leading to quicker cash generation from sales.
Looking further back, the cash conversion cycle has shown a mixed performance with some quarters exhibiting longer cycles, such as Aug 31, 2022, where it peaked at 157.85 days, and others showing shorter cycles, like Nov 30, 2022, at 70.66 days. The longer cycles could suggest delays in inventory turnover or slower collections on sales, impacting cash flows.
Overall, the trend in the cash conversion cycle for AZZ Incorporated appears to have improved in the most recent quarter, reflecting potential enhancements in operational efficiency and working capital management. Analyzing the components of the cash conversion cycle in more detail could provide additional insights into the specific areas driving these changes and help the company further optimize its cash conversion efficiency.
Peer comparison
Feb 29, 2024