ELF Beauty Inc (ELF)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	65.74	78.30	71.90	78.13	97.77	83.49	62.21	57.19	67.08	72.72	66.60	83.28	116.59	107.77	80.82	93.45	112.78	113.72	98.97	91.01
Days of sales outstanding (DSO)	days	52.63	43.93	50.17	44.09	49.59	41.30	49.21	42.99	48.89	44.10	45.88	42.65	45.62	44.06	45.26	46.58	54.77	42.83	38.47	39.03
Number of days of payables	days	19.99	30.70	28.82	33.08	34.86	36.15	33.78	22.10	26.46	17.25	15.17	18.95	31.12	27.08	25.36	25.82	33.07	36.23	40.31	24.40
Cash conversion cycle	days	98.39	91.54	93.25	89.14	112.50	88.65	77.64	78.08	89.51	99.57	97.32	106.98	131.09	124.75	100.71	114.21	134.48	120.32	97.14	105.64

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.74 + 52.63 – 19.99
= 98.39

The cash conversion cycle of ELF Beauty Inc has varied over the years, indicating fluctuations in its efficiency in managing its working capital. The trend shows that the company's cash conversion cycle was relatively stable around 100 to 120 days from 2020 to 2022, with some fluctuations. However, there was a significant improvement in the cycle towards the end of 2022 and throughout 2023, where it decreased to around 80 days, indicating more efficient management of cash, inventory, and receivables.

This improvement suggests that ELF Beauty Inc may have optimized its working capital processes, such as reducing inventory holding periods and speeding up accounts receivable collection. A lower cash conversion cycle generally implies that the company is able to generate cash more quickly from its operations, which can improve liquidity and potentially profitability.

In 2024, although there was a slight increase in the cash conversion cycle compared to the previous year, it remained below 100 days, indicating that ELF Beauty Inc continues to effectively manage its working capital. Overall, a decreasing trend in the cash conversion cycle over the years reflects positively on the company's operational efficiency and financial health.