Insteel Industries Inc (IIIN)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.62 | 64.59 | 114.60 | 61.51 | 60.39 |
| Days of sales outstanding (DSO) | days | 41.15 | 35.66 | 36.04 | 41.97 | 41.56 |
| Number of days of payables | days | 28.53 | 21.47 | 27.13 | 38.47 | 34.12 |
| Cash conversion cycle | days | 80.24 | 78.78 | 123.51 | 65.01 | 67.83 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.62 + 41.15 – 28.53
= 80.24
The cash conversion cycle for Insteel Industries Inc has shown some variability over the past five years. In 2024, the company's cash conversion cycle was 80.24 days, slightly higher than the previous year's figure of 78.78 days. This indicates that it took the company approximately 80 days to convert its investments in inventory and accounts receivable into cash during the most recent fiscal year.
Compared to the significant increase in the cash conversion cycle to 123.51 days in 2022, the recent decrease in 2024 suggests an improvement in the company's ability to efficiently manage its working capital. However, it is important to note that the 2024 figure is still higher than the levels observed in 2021 and 2020, indicating a longer cash conversion cycle.
Overall, Insteel Industries Inc should continue to monitor and potentially take measures to optimize its cash conversion cycle to ensure effective management of its working capital and enhance overall financial performance.
Peer comparison
Sep 30, 2024