Copart Inc (CPRT)

Cash conversion cycle

		Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019
Days of inventory on hand (DOH)	days	5.89	6.57	6.23	6.33	6.05	6.96	8.18	8.73	9.98	10.21	10.31	10.27	10.40	10.30	8.55	8.28	6.12	5.91	5.56	6.04
Days of sales outstanding (DSO)	days	67.40	71.51	75.14	67.13	65.39	66.91	75.89	64.77	65.90	63.78	74.74	70.78	67.98	65.93	74.92	66.50	62.38	62.05	84.37	75.68
Number of days of payables	days	26.10	—	—	—	27.23	—	—	—	31.76	—	—	—	37.77	—	—	—	40.50	—	—	—
Cash conversion cycle	days	47.20	78.09	81.37	73.46	44.21	73.87	84.07	73.50	44.12	74.00	85.05	81.05	40.61	76.23	83.46	74.78	28.00	67.96	89.93	81.72

July 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.89 + 67.40 – 26.10
= 47.20

The cash conversion cycle of Copart Inc, which reflects the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has shown fluctuations over the past few periods.

From the data provided, we can observe that the cash conversion cycle has varied between 28.00 days and 89.93 days over the last 21 periods, indicating some level of volatility in the company's operating cycle efficiency.

On average, Copart Inc typically takes around 70 days to convert its investments in inventory into cash. This means that the company operates with a relatively long cash conversion cycle, highlighting potential areas where improvements in efficiency could lead to better cash flow management.

It is important for Copart Inc to monitor and analyze the components of the cash conversion cycle, including the days inventory outstanding, days sales outstanding, and days payables outstanding, in order to identify opportunities for optimization and better working capital management. By reducing the cash conversion cycle, the company can potentially enhance its liquidity position and operational efficiency.