Eagle Materials Inc (EXP)
Cash conversion cycle
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 95.47 | 86.71 | 70.61 | 64.37 | 70.86 |
| Days of sales outstanding (DSO) | days | 35.90 | 34.39 | 35.91 | 35.98 | 33.73 |
| Number of days of payables | days | 29.87 | 29.49 | 26.71 | 30.92 | 25.30 |
| Cash conversion cycle | days | 101.50 | 91.61 | 79.81 | 69.43 | 79.30 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.47 + 35.90 – 29.87
= 101.50
The cash conversion cycle for Eagle Materials Inc has exhibited fluctuations over the past five years. In March 2021, the company had a cash conversion cycle of 79.30 days, which decreased to 69.43 days by March 2022. However, the cycle increased to 79.81 days by March 2023, indicating a longer period for the company to convert its investments in inventory and receivables into cash.
By March 2024, the cash conversion cycle further extended to 91.61 days, reflecting potential challenges in managing working capital efficiently. The most recent data for March 2025 shows a significant increase in the cycle to 99.88 days, suggesting a longer wait time for Eagle Materials Inc to realize cash from its operating activities.
This trend indicates a need for the company to focus on optimizing its inventory turnover, accounts receivable collection, and accounts payable management to enhance its cash flow efficiency and liquidity position. A prolonged cash conversion cycle could indicate potential liquidity constraints and inefficiencies in the company's operating cycle that may require attention to improve overall financial performance.