Flex Ltd (FLEX)

Cash conversion cycle

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	78.25	81.93	83.21	86.05	88.21	92.34	94.60	98.04	97.88	104.01	106.57	105.54	99.62	92.46	79.82	69.14	63.36	61.93	61.05	58.06
Days of sales outstanding (DSO)	days	51.91	57.28	57.23	45.99	42.66	52.28	53.19	52.36	51.48	54.69	57.30	57.92	54.52	55.68	55.66	57.69	64.17	65.53	63.01	56.47
Number of days of payables	days	79.42	78.25	78.31	69.65	63.52	71.71	75.62	76.73	74.40	87.98	94.05	97.54	94.68	92.99	90.32	84.77	85.35	86.38	85.31	76.60
Cash conversion cycle	days	50.74	60.97	62.13	62.39	67.36	72.91	72.18	73.68	74.95	70.72	69.82	65.92	59.46	55.15	45.15	42.07	42.17	41.09	38.75	37.93

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, which represents the time it takes for the company to convert its investments in raw materials into cash inflows from sales, has shown fluctuations over the reported periods.

- The cash conversion cycle increased gradually from around 37.93 days in June 30, 2020, to a peak of 74.95 days on March 31, 2023.
- Thereafter, the cycle decreased to 50.74 days in March 31, 2025, indicating an improvement in the efficiency of the company's working capital management.
- The company experienced a significant increase in the cash conversion cycle from December 31, 2021, to March 31, 2022, reaching 59.46 days, possibly due to changes in operational processes or market conditions.
- Overall, the trend in the cash conversion cycle suggests that Flex Ltd may have implemented measures to streamline its operations and effectively manage its cash flow, as evidenced by the reduction in days from the peak in 2023.

In conclusion, monitoring the cash conversion cycle is crucial for assessing the efficiency of Flex Ltd's working capital management and its ability to convert investments in inventory into cash inflows.