Donaldson Company Inc (DCI)
Cash conversion cycle
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 75.26 | 67.22 | 81.89 | 74.56 | 68.87 |
| Days of sales outstanding (DSO) | days | 64.09 | 63.80 | 68.06 | 70.69 | 64.37 |
| Number of days of payables | days | 59.90 | 49.02 | 55.18 | 56.99 | 40.06 |
| Cash conversion cycle | days | 79.45 | 82.00 | 94.78 | 88.26 | 93.18 |
July 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 75.26 + 64.09 – 59.90
= 79.45
The cash conversion cycle for Donaldson Company Inc has shown variability over the past five years. In particular:
- In Jul 2024, the cash conversion cycle improved to 79.45 days from 82.00 days in the previous year.
- The cycle was at its lowest point in Jul 2023 at 82.00 days, indicating efficient management of working capital.
- The cycle increased in Jul 2022 to 94.78 days, possibly due to factors impacting the company's inventory turnover and accounts payable days.
- In Jul 2021, the cycle decreased slightly to 88.26 days compared to the prior year.
- The longest cash conversion cycle observed was in Jul 2020 at 93.18 days, potentially signaling challenges in managing the company's cash flow and working capital effectively over that period.
Overall, fluctuations in the cash conversion cycle of Donaldson Company Inc suggest varying efficiency in converting input costs into cash receipts across the years, highlighting the importance of closely monitoring working capital management practices.