ESCO Technologies Inc (ESE)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 125.72 | 115.76 | 123.20 | 121.62 | 122.05 | 112.81 | 130.22 | 133.59 | 132.75 | 120.68 | 115.11 | 120.15 | 116.53 | 107.75 | 122.25 | 113.89 | 110.57 | 104.13 | 120.59 | 113.15 |
| Days of sales outstanding (DSO) | days | 73.98 | 76.52 | 75.28 | 73.07 | 66.21 | 70.48 | 76.73 | 66.97 | 68.12 | 74.79 | 68.84 | 64.24 | 72.76 | 72.27 | 66.64 | 73.22 | 73.54 | 78.50 | 76.44 | 72.98 |
| Number of days of payables | days | 48.38 | 54.70 | 49.13 | 52.13 | 49.54 | 54.70 | 51.71 | 54.77 | 51.20 | 46.48 | 41.54 | 38.93 | 35.75 | 40.24 | 43.60 | 43.30 | 43.79 | 53.17 | 56.42 | 52.79 |
| Cash conversion cycle | days | 151.32 | 137.59 | 149.35 | 142.57 | 138.71 | 128.59 | 155.24 | 145.79 | 149.66 | 148.99 | 142.42 | 145.47 | 153.54 | 139.79 | 145.29 | 143.81 | 140.32 | 129.47 | 140.61 | 133.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 125.72 + 73.98 – 48.38
= 151.32
The cash conversion cycle of Esco Technologies, Inc. has fluctuated over the past eight quarters. The company's cash conversion cycle was the longest in Q3 2022 at 154.77 days and the shortest in Q4 2022 at 128.19 days.
In general, the trend shows some variability, with periods of increase followed by periods of decrease. This indicates that Esco Technologies may have experienced challenges in managing their working capital effectively during certain quarters, but also made improvements in other quarters.
It is important for the company to monitor and manage its cash conversion cycle efficiently as a shorter cycle indicates that the company is able to convert its raw materials into cash quickly, which is a positive sign for liquidity and operational efficiency. Monitoring the cash conversion cycle can help management identify areas for improvement in inventory management, accounts receivable, and accounts payable to optimize working capital and overall financial performance.
Peer comparison
Dec 31, 2023