Catalent Inc (CTLT)

Cash conversion cycle

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Days of inventory on hand (DOH)	days	61.12	87.99	80.37	77.66	56.02
Days of sales outstanding (DSO)	days	76.73	85.79	79.89	92.39	98.87
Number of days of payables	days	38.44	48.02	48.20	53.11	55.50
Cash conversion cycle	days	99.41	125.77	112.06	116.95	99.39

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.12 + 76.73 – 38.44
= 99.41

The cash conversion cycle of Catalent Inc has varied over the past five years. In the most recent fiscal year ending on June 30, 2024, the cash conversion cycle improved to 99.41 days compared to 125.77 days in the previous year, indicating a more efficient management of working capital. This suggests that the company has been able to reduce the time it takes to convert its investments in inventory and other resources into cash from sales.

Comparing the latest data to the figures from five years ago, we note that the cash conversion cycle has remained relatively stable, with fluctuations in between. This stability can indicate that Catalent Inc has been successful in managing its working capital efficiency over time.

Overall, a lower cash conversion cycle is typically preferred as it signifies that the company is able to generate cash from its operating cycle more quickly. By effectively managing its accounts receivable, inventory, and accounts payable, Catalent Inc has been able to improve its cash conversion cycle in the most recent fiscal year, which is a positive sign for the company's financial health and operational efficiency.