HealthEquity Inc (HQY)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 35.78 | 33.77 | 36.37 | 38.07 | 39.95 | 38.32 | 38.22 | 42.34 | 43.34 | 40.61 | 44.10 | 42.68 | 44.46 | 43.43 | 37.89 | 38.82 | 37.92 | 32.60 | 36.93 | 41.42 |
| Number of days of payables | days | 6.21 | 5.20 | 5.75 | 10.15 | 6.94 | 6.84 | 6.39 | 6.82 | 7.11 | 7.76 | 8.04 | 7.05 | 14.67 | 3.00 | 2.72 | 5.77 | 0.98 | 4.72 | 7.95 | 5.89 |
| Cash conversion cycle | days | 29.57 | 28.57 | 30.62 | 27.93 | 33.01 | 31.48 | 31.83 | 35.51 | 36.23 | 32.85 | 36.06 | 35.62 | 29.78 | 40.43 | 35.17 | 33.04 | 36.93 | 27.88 | 28.98 | 35.53 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 35.78 – 6.21
= 29.57
The cash conversion cycle is used to assess the efficiency of a company's working capital management. Looking at the data provided for HealthEquity Inc, we observe fluctuations in the cash conversion cycle over the periods outlined.
The cash conversion cycle for HealthEquity Inc ranged from a low of 27.88 days on October 31, 2020, to a high of 40.43 days on October 31, 2021. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, then back into cash by paying off its liabilities.
Generally, a shorter cash conversion cycle is desirable as it indicates that the company is efficiently managing its working capital. The trend in the cash conversion cycle for HealthEquity Inc fluctuated somewhat but appeared to have improved towards the end of the period, with a cycle of 28.57 days on October 31, 2024.
It's worth noting that a decrease in the cash conversion cycle can be a positive sign, indicating better working capital management and potentially improved liquidity. Conversely, an increasing cycle may suggest inefficiencies in the company's operations or financial health, possibly leading to cash flow challenges in the future.
Overall, while fluctuations occurred in HealthEquity Inc's cash conversion cycle over the given periods, the company should continue monitoring and managing this metric to ensure optimal working capital efficiency and financial health.
Peer comparison
Jan 31, 2025