Lindsay Corporation (LNN)
Cash conversion cycle
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 135.51 | 123.44 | 123.74 | 127.00 | 118.73 |
| Days of sales outstanding (DSO) | days | 70.11 | 78.39 | 65.45 | 60.19 | 65.05 |
| Number of days of payables | days | 32.83 | 35.05 | 38.34 | 39.53 | 33.49 |
| Cash conversion cycle | days | 172.79 | 166.78 | 150.85 | 147.66 | 150.30 |
August 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 135.51 + 70.11 – 32.83
= 172.79
The cash conversion cycle of Lindsay Corporation has shown a fluctuating trend over the past five years. In 2024, the cash conversion cycle increased to 172.79 days from 166.78 days in 2023. This indicates that the company took longer to convert its investment in inventory into cash during the most recent year.
Comparing the data to previous years, the cycle was higher in 2024 than in 2022 and 2021 but lower than in 2020. This suggests that there may have been some inefficiencies in managing the company's cash flow during the most recent year.
Overall, the analysis indicates that Lindsay Corporation may need to focus on improving its inventory management and accounts receivable collection processes to shorten the cash conversion cycle and enhance its liquidity position in the future.
Peer comparison
Aug 31, 2024