Donaldson Company Inc (DCI)
Cash conversion cycle
Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | 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 | ||
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Days of inventory on hand (DOH) | days | 77.96 | 81.76 | 84.11 | 80.60 | 75.01 | 70.62 | 69.27 | 69.52 | 67.22 | 71.70 | 80.02 | 77.93 | 81.89 | 86.77 | 84.72 | 82.31 | 74.57 | 73.67 | 74.73 | 71.47 |
Days of sales outstanding (DSO) | days | 65.49 | 66.64 | 60.03 | 63.30 | 64.09 | 67.53 | 64.07 | 61.99 | 63.80 | 66.43 | 61.34 | 62.84 | 68.06 | 67.00 | 65.13 | 66.81 | 70.69 | 73.23 | 70.20 | 66.69 |
Number of days of payables | days | 55.95 | 55.91 | 58.35 | 57.90 | 59.70 | 58.76 | 52.07 | 52.58 | 49.02 | 49.60 | 48.22 | 51.00 | 55.18 | 57.06 | 57.19 | 57.38 | 57.00 | 54.85 | 49.04 | 45.42 |
Cash conversion cycle | days | 87.50 | 92.49 | 85.79 | 86.01 | 79.40 | 79.40 | 81.26 | 78.93 | 82.00 | 88.53 | 93.13 | 89.78 | 94.78 | 96.72 | 92.66 | 91.74 | 88.26 | 92.05 | 95.89 | 92.74 |
July 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.96 + 65.49 – 55.95
= 87.50
The analysis of Donaldson Company's cash conversion cycle (CCC) over the period from October 2020 to July 2025 reveals notable trends and fluctuations indicative of the company's operational efficiency and liquidity management.
Initially, the CCC varied within a relatively narrow range, starting at approximately 92.74 days in October 2020 and experiencing minor fluctuations through 2021. The cycle exhibited a slight decrease during the latter half of 2021, reaching around 88.26 days in July 2021, before increasing again to approximately 96.72 days by April 2022. This upward movement suggests a lengthening in the time taken to convert investments in inventory and receivables into cash, possibly reflecting changes in inventory management, collection processes, or sales cycles.
Throughout 2022, the CCC remained elevated, peaking at approximately 94.78 days in July 2022, before gradually declining toward the end of the year to around 89.78 days in October 2022. The downward trend indicates a potential improvement in operational efficiency, with shorter cycle times leading to quicker cash inflows relative to the company's operating cycle.
In 2023, the CCC demonstrated increased variability, with a notable decline to 88.53 days in April 2023, followed by a significant drop to 82.00 days in July 2023. The subsequent decline continued into October 2023, reaching approximately 78.93 days, reflecting a substantial enhancement in cash conversion efficiency. This trend suggests the company may have optimized its inventory turnover, receivables collection, or both, resulting in faster cash realization.
Into 2024, the CCC exhibited slight fluctuations, averaging around the low to mid-80s days, with readings such as 81.26 days in January, 79.40 days by April and July, but then rising modestly to 86.01 days in October. These changes might be attributed to seasonal or operational adjustments influencing working capital management.
In the most recent data for 2025, the CCC displayed some increases, reaching approximately 92.49 days in April, but remained relatively stable around 87.50 days in July. This suggests a modest trend toward lengthening, potentially indicating shifts in inventory or receivables that are slightly reducing operational efficiency.
Overall, the company's cash conversion cycle has experienced a downward trend over the analyzed period, especially from mid-2023 onward, implying ongoing improvements in managing inventory, receivables, and payables. The reduction in cycle length enhances liquidity and reduces working capital requirements, which can position the company favorably in terms of cash flow management.
In conclusion, Donaldson Company Inc has demonstrated a generally improving cash conversion cycle, with notable reductions in recent periods suggesting enhanced operational efficiencies. Continuous monitoring of the cycle components is advisable to sustain these improvements and adapt to operational or market changes.