Commercial Metals Company (CMC)

Cash conversion cycle

		Aug 31, 2024	May 31, 2024	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
Days of inventory on hand (DOH)	days	48.61	72.66	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
Days of sales outstanding (DSO)	days	53.70	53.31	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
Number of days of payables	days	17.54	20.48	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
Cash conversion cycle	days	84.77	105.49	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

August 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.61 + 53.70 – 17.54
= 84.77

The cash conversion cycle of Commercial Metals Company has been relatively stable over the past few years, with slight fluctuations observed. On average, the company takes around 90 days to convert its investments in inventory and other resources into cash receipts from customers.

The cash conversion cycle decreased from August 2024 to November 2024, indicating efficiency improvement in managing cash flow and working capital. However, it increased in the previous period, May 2024 to August 2024, suggesting some challenges in managing inventory levels and accounts receivable.

Overall, Commercial Metals Company should continue monitoring and optimizing its cash conversion cycle to enhance operational efficiency, maintain liquidity, and improve cash flow management.