Donaldson Company Inc (DCI)
Cash conversion cycle
| 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 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 75.26 | 70.86 | 69.39 | 69.52 | 67.22 | 71.70 | 80.02 | 77.93 | 81.89 | 87.03 | 84.94 | 82.44 | 74.61 | 73.71 | 74.74 | 71.48 | 68.97 | 70.74 | 69.55 | 70.38 |
| Days of sales outstanding (DSO) | days | 64.09 | 66.00 | 62.89 | 61.99 | 63.80 | 66.43 | 61.34 | 62.84 | 68.06 | 67.13 | 65.32 | 67.09 | 71.09 | 73.50 | 70.51 | 67.01 | 64.71 | 62.77 | 62.80 | 65.11 |
| Number of days of payables | days | 59.90 | 58.96 | 52.16 | 52.58 | 49.02 | 49.60 | 48.22 | 51.00 | 55.18 | 57.23 | 57.34 | 57.47 | 57.03 | 54.88 | 49.04 | 45.43 | 40.11 | 41.38 | 41.74 | 44.60 |
| Cash conversion cycle | days | 79.45 | 77.91 | 80.12 | 78.93 | 82.00 | 88.53 | 93.13 | 89.78 | 94.78 | 96.93 | 92.92 | 92.06 | 88.67 | 92.33 | 96.20 | 93.07 | 93.56 | 92.13 | 90.62 | 90.88 |
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 of Donaldson Company Inc, which represents the time it takes for the company to convert its investments in inventory and other resources back into cash through sales, has fluctuated over the past several reporting periods.
From October 2019 to July 2020, the cash conversion cycle remained relatively stable between 90 to 93 days, indicating a consistent period for the company to convert its resources back into cash. Subsequently, there was a slight decrease in the cycle to around 88 days by October 2020, but it started increasing again steadily.
Between January 2021 and July 2021, the cash conversion cycle increased slightly from around 88 to 92 days. The trend continued with further increases, reaching a peak of 96.93 days by April 2022. This suggests that the company took longer to convert its investments into cash during this period.
However, there was a slight improvement in the cycle by July 2022, showing a decrease to 94.78 days. This improvement was short-lived as the cycle increased in the following periods, peaking at 96.20 days by April 2023. Subsequently, there was a significant decrease in the cycle by July 2023 to 82.00 days, suggesting a more efficient conversion of resources into cash.
The cycle increased in the following periods, reaching a high of 93.13 days by January 2024, before declining to 80.12 days by April 2024. The cycle increased marginally by July 2024 to 79.45 days, indicating a moderate period for the company to convert its resources into cash compared to the previous periods.
Overall, the fluctuations in the cash conversion cycle of Donaldson Company Inc suggest varying efficiencies in managing its working capital, inventory, and cash flow over the analyzed periods. It is essential for the company to closely monitor and optimize its cash conversion cycle to ensure effective utilization of resources and improved financial performance.