Eagle Materials Inc (EXP)
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 | 79.50 | 65.17 | 59.24 | 64.96 | 67.62 |
| Days of sales outstanding (DSO) | days | 35.05 | 36.70 | 36.70 | 32.36 | 72.41 |
| Number of days of payables | days | 27.04 | 24.65 | 28.46 | 23.19 | 20.92 |
| Cash conversion cycle | days | 87.51 | 77.22 | 67.49 | 74.13 | 119.11 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.50 + 35.05 – 27.04
= 87.51
The cash conversion cycle of Eagle Materials Inc has exhibited fluctuations over the past five years. As of March 31, 2024, the cash conversion cycle stands at 87.51 days, showing an increase from the previous year. This indicates that the company takes longer to convert its investments in inventory back into cash.
Comparing this to previous years, there was a downward trend from 2020 to 2022, where the cash conversion cycle decreased steadily. However, there was a slight uptick in 2023 before the significant increase in 2024.
Analyzing these changes in the cash conversion cycle can provide insights into the efficiency of Eagle Materials Inc's working capital management and its ability to convert inventory into cash. Further investigation into the underlying factors driving these fluctuations may be necessary to assess the company's operational effectiveness in managing its cash flow.