Hewlett Packard Enterprise Co (HPE)
Cash conversion cycle
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 470.02 | 271.44 | 282.04 | 288.71 | 151.51 |
| Days of sales outstanding (DSO) | days | 89.90 | 88.00 | 52.53 | 52.27 | 45.80 |
| Number of days of payables | days | 665.85 | 420.44 | 476.37 | 448.27 | 305.00 |
| Cash conversion cycle | days | -105.93 | -61.01 | -141.80 | -107.28 | -107.69 |
October 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 470.02 + 89.90 – 665.85
= -105.93
Hewlett Packard Enterprise Co has shown varying trends in its cash conversion cycle over the past five years. The company's cash conversion cycle was -105.93 days at the end of October 2024, indicating that it took the company approximately 106 days on average to convert its investments in inventory and accounts receivable into cash inflows from sales. This suggests efficient management of working capital and a relatively quick turnaround of operating assets into cash.
Comparing this to previous years, we observe some fluctuations in the cash conversion cycle. In October 2023, the company had a cash conversion cycle of -61.01 days, showing a shorter period to convert investments to cash, possibly signaling more efficient working capital management. However, in October 2022, the cash conversion cycle increased significantly to -141.80 days, indicating a longer period to convert assets to cash, which may raise concerns about inventory management or collections on accounts receivable.
In October 2021 and October 2020, the company had cash conversion cycles of -107.28 days and -107.69 days, respectively, showing some stability in the efficiency of its working capital management across these years.
Overall, the trend in the cash conversion cycle for Hewlett Packard Enterprise Co suggests some variability in managing its operating assets to generate cash flows, with the most recent year showing a longer period for conversion. Further analysis of the components contributing to the cash conversion cycle, such as inventory turnover and accounts receivable collection efficiency, would provide additional insights into the company's working capital management performance.
Peer comparison
Oct 31, 2024