Cabot Corporation (CBT)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 66.41 | 69.06 | 70.54 | 73.14 | 61.98 |
| Days of sales outstanding (DSO) | days | 66.99 | 64.53 | 70.62 | 69.06 | 58.37 |
| Number of days of payables | days | 59.55 | 51.70 | 56.62 | 67.13 | 54.56 |
| Cash conversion cycle | days | 73.84 | 81.88 | 84.53 | 75.07 | 65.79 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.41 + 66.99 – 59.55
= 73.84
The cash conversion cycle of Cabot Corporation has shown fluctuating trends over the past five years. In the most recent fiscal year ending on September 30, 2024, the cash conversion cycle decreased to 73.84 days from 81.88 days in the previous year. This suggests an improvement in the company's efficiency in managing its cash, accounts receivable, and accounts payable.
Compared to the fiscal year ending on September 30, 2020, where the cash conversion cycle was 65.79 days, there has been a noticeable increase over the five-year period. The company's cash conversion cycle hit its peak in the fiscal year ending on September 30, 2022, at 84.53 days, indicating a longer cycle for cash to flow through the operating cycle.
Overall, Cabot Corporation has experienced fluctuations in its cash conversion cycle, with improvements in recent years and a longer cycle in the middle of the period. It is essential for the company to continue monitoring and managing its cash flow efficiency to enhance performance and financial stability.
Peer comparison
Sep 30, 2024