Donaldson Company Inc (DCI)
Cash conversion cycle
Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
---|---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 77.96 | 75.26 | 67.22 | 81.89 | 74.56 |
Days of sales outstanding (DSO) | days | 65.49 | 64.09 | 63.80 | 68.06 | 70.69 |
Number of days of payables | days | 55.95 | 59.90 | 49.02 | 55.18 | 56.99 |
Cash conversion cycle | days | 87.50 | 79.45 | 82.00 | 94.78 | 88.26 |
July 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.96 + 65.49 – 55.95
= 87.50
The cash conversion cycle (CCC) of Donaldson Company Inc has demonstrated notable fluctuations over the analyzed period from July 31, 2021, through July 31, 2025. Specifically, the CCC was recorded at 88.26 days as of July 31, 2021. This measure increased to 94.78 days by July 31, 2022, indicating a lengthening of the cycle, which could suggest delays in cash collection or increases in inventory holding periods relative to accounts payable.
Subsequently, the CCC decreased to 82.00 days by July 31, 2023, illustrating an improvement in cash flow management or operational efficiencies. The downward trend continued into July 31, 2024, with the cycle narrowing further to 79.45 days, signaling ongoing enhancements in cash conversion efficiency.
However, by July 31, 2025, there was a slight increase to 87.50 days, which may reflect temporary operational adjustments or external factors impacting receivables, inventory management, or payables. Overall, the data indicates that Donaldson Company Inc has experienced period-to-period volatility in its cash conversion cycle but has generally maintained a cycle within a range of approximately 79 to 95 days, with recent metrics suggesting a return to a somewhat longer cycle compared to the most recent prior period.
This analysis emphasizes the company's ongoing efforts to optimize operating cash flows, with shorter cash conversion cycles associated with more efficient working capital management. The fluctuations observed may warrant further investigation into underlying operational factors influencing receivables, inventory turnover, and payables practices.