Helmerich and Payne Inc (HP)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 22.63 | 17.68 | 19.65 | 25.20 | 19.52 |
| Days of sales outstanding (DSO) | days | 55.43 | 51.36 | 81.32 | 68.56 | 39.63 |
| Number of days of payables | days | 25.94 | 24.56 | 28.36 | 21.59 | 6.83 |
| Cash conversion cycle | days | 52.12 | 44.49 | 72.61 | 72.18 | 52.32 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.63 + 55.43 – 25.94
= 52.12
The cash conversion cycle of Helmerich and Payne Inc has fluctuated over the past five years. In 2024, the company's cash conversion cycle was 52.12 days, an increase from the previous year's cycle of 44.49 days. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the most recent fiscal year.
Comparing to 2022 and 2021, where the cash conversion cycle was 72.61 days and 72.18 days, respectively, the company showed improvement in managing its working capital during 2023 and 2024. This suggests that the company became more efficient in converting its resources into cash during those years.
However, when looking back to 2020 where the cash conversion cycle was 52.32 days, the cycle in 2024 remained relatively high. It is important for the company to continue monitoring and improving its cash conversion cycle to ensure effective management of its working capital and liquidity position.
Peer comparison
Sep 30, 2024