Helmerich and Payne Inc (HP)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.68 | 19.65 | 25.20 | 19.52 | 24.44 |
| Days of sales outstanding (DSO) | days | 51.36 | 81.32 | 68.56 | 39.63 | 64.64 |
| Number of days of payables | days | 24.56 | 28.36 | 21.59 | 6.83 | 7.41 |
| Cash conversion cycle | days | 44.49 | 72.61 | 72.18 | 52.32 | 81.67 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.68 + 51.36 – 24.56
= 44.49
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cycle indicates better efficiency in managing working capital. Helmerich & Payne, Inc.'s cash conversion cycle has fluctuated over the past five years. In 2023, the cycle decreased to 51.36 days from 81.32 days in 2022, indicating a significant improvement in converting inventory and other resources into cash. However, it is worth noting that in 2021, the cycle increased to 68.56 days from 39.63 days in 2020, suggesting a potential slowdown in cash conversion efficiency. Overall, the company should aim to consistently decrease its cash conversion cycle to optimize working capital management and enhance its cash flow position.
Peer comparison
Sep 30, 2023