Brady Corporation (BRC)
Cash conversion cycle
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.62 | 61.15 | 65.10 | 85.18 | 89.58 |
| Days of sales outstanding (DSO) | days | 50.47 | 50.53 | 51.41 | 54.39 | 49.34 |
| Number of days of payables | days | 29.73 | 27.57 | 27.79 | 51.41 | 41.30 |
| Cash conversion cycle | days | 74.36 | 84.10 | 88.72 | 88.16 | 97.63 |
July 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.62 + 50.47 – 29.73
= 74.36
The cash conversion cycle of Brady Corporation decreased from 97.63 days in 2020 to 74.36 days in 2024. This indicates an improvement in the company's efficiency in managing its cash flow over the years. The decreasing trend suggests that Brady Corporation has been able to streamline its operations related to inventory management, accounts receivable, and accounts payable.
A lower cash conversion cycle means that the company is able to convert its resources into cash more quickly, resulting in improved liquidity and potentially reduced financing costs. This could be a positive signal for investors and creditors, indicating effective management of working capital and efficient operations.
Overall, the decreasing trend in Brady Corporation's cash conversion cycle reflects the company's efforts in optimizing its working capital management, which is essential for sustaining and growing its operations in the long term.
Peer comparison
Jul 31, 2024