Dorian LPG Ltd (LPG)
Cash conversion cycle
| Mar 31, 2025 | Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 4.56 | 4.32 | 4.59 | 4.40 | 4.47 | 5.01 | 5.41 | 4.70 | 5.96 | 6.02 | 5.36 | 5.06 | 5.13 | 5.24 | 3.93 | 4.22 | 4.35 | 4.69 | 4.87 | 5.02 |
| Days of sales outstanding (DSO) | days | 1.40 | 65.01 | 0.75 | 51.80 | 34.51 | 74.81 | 49.58 | 62.01 | 71.50 | 93.74 | 67.27 | 79.12 | 78.05 | 58.91 | 35.04 | 52.39 | 65.15 | 89.04 | 65.52 | 51.16 |
| Number of days of payables | days | 21.01 | 17.04 | 18.80 | 14.79 | 19.02 | 22.29 | 25.10 | 24.19 | 24.39 | 22.98 | 19.82 | 18.32 | 21.60 | 20.57 | 20.82 | 30.26 | 21.33 | 24.85 | 27.11 | 27.23 |
| Cash conversion cycle | days | -15.04 | 52.30 | -13.46 | 41.40 | 19.96 | 57.54 | 29.90 | 42.51 | 53.07 | 76.78 | 52.81 | 65.87 | 61.58 | 43.58 | 18.15 | 26.35 | 48.18 | 68.89 | 43.28 | 28.94 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.56 + 1.40 – 21.01
= -15.04
The cash conversion cycle of Dorian LPG Ltd has exhibited fluctuations over the period analyzed. The company's cash conversion cycle, which represents the time it takes for a company to convert its investment in inventory into cash receipts from customers, stood at 28.94 days as of June 30, 2020. It increased to 43.28 days by September 30, 2020, indicating a longer period for the company to convert its investments into cash.
The cycle further extended to 68.89 days by December 31, 2020, before decreasing to 48.18 days by March 31, 2021. This reduction in the cash conversion cycle suggests an improvement in the company's efficiency in managing its working capital and converting inventory into cash.
Subsequently, the cycle decreased to 26.35 days by June 30, 2021, indicating a more efficient conversion process. However, the cycle increased again to 65.87 days by June 30, 2022, reflecting a longer period to convert investments into cash.
The cycle fluctuated over the following quarters, reaching its lowest point at -15.04 days by March 31, 2025. A negative cash conversion cycle suggests that the company is able to pay its suppliers later, possibly using trade credit effectively.
It is essential for Dorian LPG Ltd to effectively manage its cash conversion cycle to ensure optimal utilization of its resources and maintain a healthy cash flow position. Periodic monitoring and analysis of this metric can help the company identify inefficiencies in its working capital management and take corrective actions to improve its overall financial performance.