Flex Ltd (FLEX)
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 | 78.25 | 92.25 | 101.66 | 105.09 | 63.36 |
| Days of sales outstanding (DSO) | days | 51.91 | 45.35 | 47.68 | 57.64 | 64.17 |
| Number of days of payables | days | 79.42 | 66.43 | 78.76 | 99.89 | 85.36 |
| Cash conversion cycle | days | 50.74 | 71.18 | 70.57 | 62.85 | 42.17 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.25 + 51.91 – 79.42
= 50.74
The cash conversion cycle of Flex Ltd has shown fluctuating trends over the past five years. In March 2021, the company's cash conversion cycle stood at 42.17 days, indicating that it took approximately 42 days for Flex to convert its investments in raw materials into cash receipts from customers.
By March 2022, the cash conversion cycle had increased to 62.85 days, signifying an elongation in the time taken to convert inventory into sales and eventually into cash. This suggests potential challenges in managing working capital efficiently.
The trend continued to worsen in the subsequent years, reaching 70.57 days in March 2023, 71.18 days in March 2024, and then slightly improving to 50.74 days in March 2025. These figures reflect prolonged periods in inventory holding and collection of receivables, which could impact the company's liquidity and cash flow position.
Overall, Flex Ltd's cash conversion cycle has been volatile, with a general trend of lengthening over the years, indicating potential inefficiencies in managing inventory, accounts receivable, and accounts payable. Addressing these issues could help improve the company's working capital management and enhance its overall financial performance.
Peer comparison
Mar 31, 2025