Coty Inc (COTY)

Cash conversion cycle

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Days of inventory on hand (DOH)	days	51.10	51.84	53.54	60.27	63.63	59.93	55.29	52.02	49.26	49.14	46.19	51.62	53.22	65.08	55.20	52.38	42.37	33.00	34.42	35.57
Days of sales outstanding (DSO)	days	27.57	29.98	31.77	35.22	26.10	28.28	31.25	34.44	32.11	35.33	38.50	40.68	43.97	42.35	49.70	39.49	31.45	39.82	49.41	45.22
Number of days of payables	days	93.99	85.30	101.00	98.05	107.72	105.70	114.67	94.57	94.45	97.84	109.35	96.29	95.36	113.19	101.78	78.19	74.36	48.89	53.36	47.85
Cash conversion cycle	days	-15.33	-3.48	-15.69	-2.56	-17.99	-17.49	-28.14	-8.12	-13.08	-13.37	-24.66	-4.00	1.83	-5.77	3.13	13.68	-0.54	23.93	30.46	32.94

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.10 + 27.57 – 93.99
= -15.33

The cash conversion cycle of Coty Inc has fluctuated over the past few quarters, reflecting changes in the efficiency of its cash management and working capital. The cash conversion cycle, which is an indicator of how long it takes for the company to convert its investments in inventory and other resources into cash collected from customers, ranged from -28.14 days to 3.13 days in the last few quarters.

A negative cash conversion cycle indicates that the company is able to generate cash from its operations before having to pay its suppliers, which can be advantageous for liquidity and working capital management. In contrast, a positive cash conversion cycle implies that the company needs to finance its operating cycle, potentially leading to higher financing costs.

Coty Inc saw a significant improvement in its cash conversion cycle in the most recent quarter, with a reduction to -15.33 days, suggesting an enhancement in the company's efficiency in managing its working capital and turning inventory into cash. However, it's important to monitor how sustainable this improvement is over the upcoming quarters to assess the company's overall cash flow management effectiveness.