Enersys (ENS)
Cash conversion cycle
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1,492.37 | 2,093.18 | 95.16 | 78.50 | — |
| Days of sales outstanding (DSO) | days | 54.59 | 64.49 | 80.76 | 76.37 | 1,039.06 |
| Number of days of payables | days | 790.26 | 993.44 | 52.27 | 49.06 | — |
| Cash conversion cycle | days | 756.69 | 1,164.22 | 123.65 | 105.81 | 1,039.06 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,492.37 + 54.59 – 790.26
= 756.69
The cash conversion cycle (CCC) of Enersys has fluctuated significantly over the past five years. In March 2024, the company's CCC was 756.69 days, showing an improvement from the previous year's 1,164.22 days. However, it is still much higher than the levels seen in March 2022 (123.65 days) and March 2021 (105.81 days).
The CCC is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A longer CCC indicates that the company is taking more time to generate cash from its operations, which can lead to liquidity challenges and inefficiencies in managing working capital.
Enersys' significant improvement in CCC from 2023 to 2024 suggests that the company may have streamlined its inventory and accounts receivable management processes, leading to a more efficient cash conversion cycle. However, the company should continue to monitor and further optimize its working capital management to maintain a healthy CCC and ensure optimal cash flow generation.
Peer comparison
Mar 31, 2024