Embecta Corp (EMBC)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	81.73	89.93	72.68	72.82	76.65	175.05	167.76	163.11	182.06
Days of sales outstanding (DSO)	days	80.64	79.80	54.09	67.46	52.07	62.48	49.96	47.20	43.25
Number of days of payables	days	63.62	57.42	43.22	48.66	63.80	128.18	134.97	121.59	159.97
Cash conversion cycle	days	98.75	112.31	83.55	91.62	64.92	109.35	82.75	88.72	65.34

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.73 + 80.64 – 63.62
= 98.75

The cash conversion cycle of Embecta Corp has shown fluctuations over the past few quarters, indicating variations in the company's efficiency in managing its cash flows.

The trend reveals that in the most recent quarter ended Sep 30, 2024, the cash conversion cycle was 98.75 days, reflecting a moderate improvement from the previous quarter. However, compared to the same quarter last year (Sep 30, 2023), the cycle has elongated.

Looking at the historical data, there are fluctuations in the cash conversion cycle, with peaks and troughs observed in different periods. For example, in Jun 30, 2023, the cycle was notably high at 109.35 days, signaling potential issues with cash flow management. Conversely, in Mar 31, 2024, the cycle decreased to 83.55 days, indicating a more efficient cash management process.

Overall, the company should aim to consistently reduce its cash conversion cycle to improve liquidity and working capital efficiency. Analyzing the components of the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payables outstanding, would provide further insights into specific areas that require attention to optimize the company's cash flow operations.