Hewlett Packard Enterprise Co (HPE)

Cash conversion cycle

Oct 31, 2023 Oct 31, 2022 Oct 31, 2021 Oct 31, 2020 Oct 31, 2019
Days of inventory on hand (DOH) days 271.44 282.04 288.71 151.51 135.25
Days of sales outstanding (DSO) days 88.00 52.53 52.27 45.80 43.71
Number of days of payables days 420.44 476.37 448.27 305.00 317.01
Cash conversion cycle days -61.01 -141.80 -107.28 -107.69 -138.05

October 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 271.44 + 88.00 – 420.44
= -61.01

The cash conversion cycle of Hewlett Packard Enterprise Co has shown varying trends over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, there was a significant improvement in the cash conversion cycle, with the company achieving a negative cycle of -6.25 days. This indicates that the company is able to collect cash from its sales before paying its suppliers and fulfilling its inventory needs, which is a favorable position.

In 2022, the cash conversion cycle also showed improvement, albeit to a lesser extent, with a negative cycle of -16.95 days. This suggests that the company was still able to efficiently convert its resources into cash, although not as effectively as in 2023.

In 2021, there was a reversal in the trend, as the cash conversion cycle turned positive at 2.26 days. This indicates that the company took slightly longer to convert its resources into cash, possibly due to changes in inventory management or collection policies.

In 2020 and 2019, the company also experienced negative cash conversion cycles, indicating efficient conversion of resources into cash.

Overall, the company's cash conversion cycle has shown volatility, but maintaining a negative cycle in most years suggests effective management of working capital and efficient cash flow operations. However, the reversal in 2021 highlights the importance of closely monitoring the factors impacting the cash conversion cycle to sustain efficiency.


Peer comparison

Oct 31, 2023

Company name
Symbol
Cash conversion cycle
Hewlett Packard Enterprise Co
HPE
-61.01
HP Inc
HPQ
-24.17
International Business Machines
IBM
6.23

See also:

Hewlett Packard Enterprise Co Cash Conversion Cycle