Medtronic PLC (MDT)

Cash conversion cycle

		Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020
Days of inventory on hand (DOH)	days	78.03	82.57	73.23	70.23	72.26
Days of sales outstanding (DSO)	days	67.86	69.44	64.97	69.02	61.84
Number of days of payables	days	36.04	41.53	36.11	34.30	34.11
Cash conversion cycle	days	109.84	110.48	102.09	104.96	100.00

April 26, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.03 + 67.86 – 36.04
= 109.84

The cash conversion cycle for Medtronic PLC has shown some fluctuations over the past five years. In the most recent fiscal year, ending on April 26, 2024, the company's cash conversion cycle stood at 109.84 days, indicating a slight improvement compared to the previous year's 110.48 days.

Looking back further, we observe a gradual increase in the cash conversion cycle from 100.00 days in April 2020 to the current level in 2024. This suggests that Medtronic PLC is taking slightly longer to convert its resources invested in inventory into cash receipts from sales and collectibles.

The trend in the cash conversion cycle can provide insights into the efficiency of Medtronic PLC's working capital management. A shorter cash conversion cycle implies that the company is able to manage its inventories efficiently, collect receivables promptly, and pay its liabilities effectively. Conversely, a longer cycle may indicate potential inefficiencies in the company's operations or challenges in managing working capital effectively.

Overall, while there has been some fluctuation in the cash conversion cycle of Medtronic PLC over the past five years, it is essential for the company to closely monitor and manage this metric to ensure optimal working capital management and operational efficiency.