Insteel Industries Inc (IIIN)
Cash conversion cycle
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.59 | 61.31 | 61.74 | 59.96 | 62.07 | 76.88 | 75.93 | 92.71 | 139.40 | 145.47 | 104.79 | 106.50 | 103.00 | 97.12 | 102.17 | 66.20 | 55.80 | 61.92 | 58.58 | 53.08 |
| Days of sales outstanding (DSO) | days | 41.15 | 42.12 | 36.19 | 28.01 | 35.66 | 34.48 | — | 30.69 | 36.07 | — | — | — | 41.97 | — | — | — | — | — | — | — |
| Number of days of payables | days | 26.83 | 23.89 | 16.95 | 15.19 | 20.64 | 21.99 | 20.55 | 16.68 | 33.00 | 58.32 | 48.22 | 46.19 | 64.42 | 82.19 | 66.91 | 32.71 | 31.53 | 39.93 | 31.41 | 25.97 |
| Cash conversion cycle | days | 77.91 | 79.54 | 80.97 | 72.78 | 77.09 | 89.37 | 55.38 | 106.73 | 142.46 | 87.15 | 56.57 | 60.31 | 80.54 | 14.93 | 35.26 | 33.49 | 24.28 | 21.99 | 27.17 | 27.12 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.59 + 41.15 – 26.83
= 77.91
The cash conversion cycle of Insteel Industries Inc has shown fluctuations over the past few quarters. In the latest quarter, ending on September 30, 2024, the cash conversion cycle was 77.91 days. This indicates that on average, it takes the company 77.91 days to convert its investments in raw materials, production, and finished goods into cash receipts from customers.
In general, a shorter cash conversion cycle is considered favorable as it means the company is able to more quickly recoup its investments in the production process. However, the trend in Insteel Industries Inc's cash conversion cycle has been somewhat erratic, with peaks and troughs observed in different quarters.
It is important for the company to closely monitor and manage its cash conversion cycle to ensure efficient operations and optimal cash flow. By reducing the time it takes to convert its investments into cash receipts, Insteel Industries Inc can improve its liquidity position and overall financial performance.
Peer comparison
Sep 30, 2024