Lindsay Corporation (LNN)
Cash conversion cycle
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 123.44 | 123.74 | 127.00 | 118.73 | 102.24 |
| Days of sales outstanding (DSO) | days | 78.39 | 65.45 | 60.19 | 65.05 | 62.10 |
| Number of days of payables | days | 35.05 | 38.34 | 39.53 | 33.49 | 32.61 |
| Cash conversion cycle | days | 166.78 | 150.85 | 147.66 | 150.30 | 131.73 |
August 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 123.44 + 78.39 – 35.05
= 166.78
The cash conversion cycle of Lindsay Corporation has exhibited fluctuations over the past five years. In 2023, the cash conversion cycle increased to 166.78 days from 150.85 days in 2022. This marks a departure from the decreasing trend observed from 2020 to 2022. The 2023 figure represents an extended period for the company to convert its resources into cash, which warrants attention from stakeholders. It is important for the company to assess the factors contributing to this increase to ensure efficient utilization of resources and timely collection of cash from its operations. Furthermore, the company may need to evaluate its inventory management and accounts receivable collection processes to optimize its cash conversion cycle.
Peer comparison
Aug 31, 2023