HP Inc (HPQ)
Cash conversion cycle
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.94 | 59.34 | 60.44 | 58.76 | 55.80 | 54.87 | 57.55 | 62.67 | 64.10 | 57.83 | 60.53 | 55.61 | 52.03 | 47.11 | 46.68 | 50.52 | 38.22 | 43.98 | 43.67 | 41.04 |
| Days of sales outstanding (DSO) | days | 35.90 | 37.96 | 41.62 | 35.35 | 34.19 | 7.37 | 37.19 | 39.98 | 42.91 | 45.12 | 41.90 | 41.53 | 47.84 | 48.16 | 46.90 | 46.28 | 38.13 | 49.59 | 43.96 | 45.00 |
| Number of days of payables | days | 116.59 | 121.46 | 118.61 | 108.37 | 102.67 | 110.28 | 108.99 | 119.14 | 128.44 | 117.22 | 117.85 | 112.88 | 116.73 | 116.16 | 113.02 | 112.87 | 98.97 | 113.47 | 111.92 | 105.30 |
| Cash conversion cycle | days | -19.75 | -24.17 | -16.54 | -14.26 | -12.68 | -48.04 | -14.25 | -16.49 | -21.43 | -14.28 | -15.42 | -15.74 | -16.86 | -20.90 | -19.44 | -16.07 | -22.62 | -19.90 | -24.29 | -19.26 |
January 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.94 + 35.90 – 116.59
= -19.75
The cash conversion cycle is a key metric that measures how long it takes a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that a company is efficient in managing its working capital and generating cash.
For HP Inc, the cash conversion cycle has been fluctuating over the past eight quarters. In Q1 2024, the company achieved a cash conversion cycle of -13.46 days, which improved compared to the previous quarter and remained negative, indicating that HP Inc is able to generate cash from its operations more quickly than it takes to pay its suppliers. This could suggest efficient inventory management and strong sales collection processes.
The trend in the cash conversion cycle for HP Inc shows some variability over the quarters, with fluctuations between positive and negative values. Overall, the company has shown a relatively efficient cash conversion cycle across the periods analyzed. However, there is room for improvement in smoothing out the fluctuations to ensure a consistent and optimized working capital management performance.
Peer comparison
Jan 31, 2024