CleanSpark Inc (CLSK)
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 | — | 2.12 | 0.96 | 1.10 | 11.45 |
| Days of sales outstanding (DSO) | days | 133.63 | 0.01 | 0.07 | 2.85 | 31.44 |
| Number of days of payables | days | 183.02 | 104.55 | 109.57 | 96.38 | 208.95 |
| Cash conversion cycle | days | -49.38 | -102.42 | -108.54 | -92.42 | -166.06 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 133.63 – 183.02
= -49.38
The cash conversion cycle (CCC) of CleanSpark Inc. has demonstrated notable fluctuations over the analyzed period from September 2020 to September 2024. Initially, as of September 30, 2020, the CCC was recorded at -166.06 days, indicating a highly efficient working capital management, where the company was able to generate cash well before it paid for its inventory and operational costs. Over the subsequent years, the CCC gradually improved, with a significant reduction in the negative value to -92.42 days as of September 30, 2021. This indicates a decrease in operational efficiency or changes in working capital practices, but the company continued to maintain a highly cash-generative cycle.
Between September 2021 and September 2022, the CCC increased slightly in absolute value to -108.54 days, reflecting minor volatility but an overall stabilization in the company's cash flows relative to its operational cycle. However, post-2022, the CCC trend moved towards less negative territory, with September 30, 2023, showing a CCC of -102.42 days. This less negative figure suggests a slight elongation in the cash cycle but still signifies that the company generally converts its investments into cash faster than it exhausts cash to fund operations.
Most recently, by September 30, 2024, the CCC further improved, reaching -49.38 days. This indicates a significant reduction in the duration of the company's cash conversion cycle, implying that CleanSpark Inc. is managing its receivables, inventory, and payables more efficiently in the current period. The shift from strongly negative to less negative values may reflect improved operational efficiency, better credit management, or a strategic adjustment in inventory and payable policies.
Overall, the trend reveals a movement toward a less negative CCC, yet the metric remains negative throughout the analyzed period. The persistent negative CCC indicates that the company continues to operate with a working capital management approach that facilitates cash inflows prior to cash outflows, although the magnitude of this advantage has decreased over time. This pattern warrants ongoing monitoring to ensure that operational efficiencies are maintained or enhanced, and that shifts in the cash conversion cycle continue to support the company's liquidity and working capital needs effectively.
Peer comparison
Sep 30, 2024