Digi International Inc (DGII)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	111.84	140.96	155.44	112.92	139.12
Days of sales outstanding (DSO)	days	59.94	45.95	47.43	51.73	77.41
Number of days of payables	days	49.80	32.49	68.72	58.07	75.72
Cash conversion cycle	days	121.98	154.41	134.15	106.58	140.81

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 111.84 + 59.94 – 49.80
= 121.98

The cash conversion cycle of Digi International Inc has shown fluctuations over the past five years. In 2024, the company's cash conversion cycle improved to 121.98 days from 154.41 days in 2023, indicating a more efficient management of its working capital. This implies that the company is taking less time to convert its investments in inventory and accounts receivable into cash.

Comparing 2024 to 2020, there has been a notable decrease in the cash conversion cycle from 140.81 days to 121.98 days, reflecting enhanced operational efficiency and potential improvements in inventory management and accounts receivable turnover.

Despite the improvement in 2024, it is important for Digi International Inc to continue monitoring its cash conversion cycle closely to ensure efficient utilization of its resources and maintaining healthy liquidity levels. Overall, a decreasing trend in the cash conversion cycle indicates better working capital management and cash flow optimization within the company.