CorVel Corp (CRVL)
Cash conversion cycle
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 64.06 | 54.73 | 62.09 | 54.18 | 52.68 |
| Number of days of payables | days | 8.55 | 8.66 | 9.14 | 9.13 | 10.39 |
| Cash conversion cycle | days | 55.51 | 46.07 | 52.95 | 45.05 | 42.29 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 64.06 – 8.55
= 55.51
The cash conversion cycle for CorVel Corp has shown some fluctuations over the past five years.
In the most recent fiscal year ending March 31, 2024, the cash conversion cycle increased to 55.51 days from 46.07 days in the previous year. This indicates that it took the company longer to convert its investments in inventory and receivables back into cash during the latest period.
Comparing this to the trend in the cash conversion cycle over the past five years, we see some variability. The lowest cash conversion cycle was observed in the fiscal year ending March 31, 2020, at 42.29 days, while the highest was in the fiscal year ending March 31, 2024, at 55.51 days.
Overall, a longer cash conversion cycle may suggest inefficiencies in managing inventory, collecting receivables, or paying liabilities, which can tie up cash resources within the company. It would be important for CorVel Corp to analyze the components of the cash conversion cycle to pinpoint areas that may be causing the increase and work towards optimizing its working capital management to improve cash flow efficiency.