HealthEquity Inc (HQY)
Cash conversion cycle
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 35.82 | 40.49 | 43.34 | 44.46 | 37.92 |
| Number of days of payables | days | 6.21 | 6.15 | 7.11 | 14.67 | 0.98 |
| Cash conversion cycle | days | 29.61 | 34.34 | 36.23 | 29.79 | 36.93 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 35.82 – 6.21
= 29.61
The cash conversion cycle of HealthEquity Inc has shown fluctuations over the past five years. As of January 31, 2021, the company's cash conversion cycle was 36.93 days, indicating the time taken to convert resources invested in inventory and accounts receivable into cash. The cycle decreased to 29.79 days by January 31, 2022, suggesting improved efficiency in managing working capital.
However, the cycle increased slightly to 36.23 days by January 31, 2023, before declining to 34.34 days by January 31, 2024. Most recently, as of January 31, 2025, the cash conversion cycle further decreased to 29.61 days, signaling a more effective conversion of resources into cash.
The trend in the cash conversion cycle indicates that HealthEquity Inc has been able to manage its working capital efficiently in recent years, with a focus on optimizing the time taken to convert investments into cash. This can positively impact the company's liquidity and financial performance by ensuring a smoother cash flow management process.
Peer comparison
Jan 31, 2025