ESCO Technologies Inc (ESE)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 115.76 | 112.81 | 120.68 | 107.75 | 104.13 |
| Days of sales outstanding (DSO) | days | 76.52 | 70.48 | 74.69 | 72.14 | 77.95 |
| Number of days of payables | days | 54.70 | 54.70 | 46.48 | 40.24 | 53.17 |
| Cash conversion cycle | days | 137.59 | 128.59 | 148.90 | 139.65 | 128.91 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 115.76 + 76.52 – 54.70
= 137.59
The cash conversion cycle (CCC) for Esco Technologies, Inc. has fluctuated over the past five years. In Sep 30, 2019, the CCC was 119.55 days, which increased to 148.87 days in Sep 30, 2021, before declining to 136.87 days in Sep 30, 2023.
The CCC is an important indicator of a company's efficiency in managing its working capital. A shorter CCC indicates that the company is able to convert its inventory and receivables into cash more quickly, which is generally favorable.
Esco Technologies' increasing CCC in 2021 may suggest potential inefficiencies in managing its inventory and receivables, leading to a longer time to convert these assets into cash. The subsequent decrease in CCC in 2023 indicates an improvement in working capital management, reducing the time taken to convert inventory and receivables into cash.
Overall, monitoring the CCC trend can provide insights into Esco Technologies' operational efficiency and effectiveness in managing its cash flows and working capital.
Peer comparison
Sep 30, 2023