Commercial Metals Company (CMC)

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	76.05	67.36	66.53	53.98	53.43	51.67	55.99	66.50	59.93	59.65	55.59	53.78	54.21	46.55	44.85	45.54	48.26	42.98	46.01	55.65
Days of sales outstanding (DSO)	days	48.81	52.01	51.68	49.24	49.12	50.19	54.40	57.34	53.98	55.14	60.63	64.78	59.06	58.41	59.20	57.77	60.17	59.60	64.21	66.80
Number of days of payables	days	24.32	22.52	23.41	18.02	19.74	18.58	20.49	24.35	21.72	23.65	26.79	21.96	21.60	18.02	19.08	16.26	18.60	16.13	19.14	19.18
Cash conversion cycle	days	100.53	96.86	94.80	85.19	82.80	83.28	89.90	99.49	92.20	91.14	89.43	96.59	91.67	86.94	84.97	87.05	89.83	86.45	91.08	103.26

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 76.05 + 48.81 – 24.32
= 100.53

The cash conversion cycle of Commercial Metals Company has shown some fluctuations over the past 20 reporting periods. The cycle represents the time taken for the company to convert its investment in inventory into cash received from customers.

The average cash conversion cycle over this period is approximately 91.77 days. This indicates that on average, it takes Commercial Metals Company around 91.77 days to convert its investments in inventory and other resources into cash receipts from customers.

The cash conversion cycle has ranged from a low of 82.80 days to a high of 103.26 days during this period. A lower cash conversion cycle signifies a more efficient management of cash flow and working capital, whereas a higher cycle might indicate delays in receiving cash from sales or inefficiencies in managing inventory and credit terms.

It is important for Commercial Metals Company to monitor and manage its cash conversion cycle effectively to optimize its working capital and ensure a healthy cash flow. Analyzing trends in the cash conversion cycle can provide insights into the company's operational efficiency and effectiveness in managing its resources.