ESCO Technologies Inc (ESE)
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 | 122.59 | 115.76 | 112.81 | 120.68 | 107.75 |
| Days of sales outstanding (DSO) | days | 86.85 | 76.52 | 70.48 | 74.69 | 72.14 |
| Number of days of payables | days | 57.66 | 54.70 | 54.70 | 46.48 | 40.24 |
| Cash conversion cycle | days | 151.78 | 137.59 | 128.59 | 148.90 | 139.65 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 122.59 + 86.85 – 57.66
= 151.78
The cash conversion cycle of ESCO Technologies Inc has fluctuated over the past five years. In 2024, the company's cash conversion cycle of 151.78 days indicates that it takes, on average, approximately 151.78 days to convert its investments in inventory and accounts receivable into cash from sales.
Compared to the previous year, the cash conversion cycle has increased from 137.59 days in 2023 to 151.78 days in 2024, suggesting a less efficient management of working capital. However, when looking at a longer-term trend, the 2024 figure is slightly higher than in 2021 and 2020 but lower than in 2022, indicating variability in the company's efficiency in managing its cash flows over the years.
It is important for ESCO Technologies Inc to closely monitor and manage its cash conversion cycle to ensure optimal utilization of its working capital and efficient cash flow management. A longer cash conversion cycle may indicate potential liquidity issues or inefficiencies in the company's operations, while a shorter cycle signifies better working capital management and improved cash flow generation.
Peer comparison
Sep 30, 2024