Medtronic PLC (MDT)

Cash conversion cycle

		Apr 26, 2024	Jan 26, 2024	Oct 27, 2023	Jul 28, 2023	Apr 28, 2023	Jan 27, 2023	Oct 28, 2022	Jul 29, 2022	Apr 29, 2022	Jan 28, 2022	Oct 29, 2021	Jul 30, 2021	Apr 30, 2021	Jan 29, 2021	Oct 30, 2020	Jul 31, 2020	Apr 24, 2020	Jan 24, 2020	Oct 25, 2019	Jul 26, 2019
Days of inventory on hand (DOH)	days	78.11	87.31	88.07	88.20	82.96	83.72	80.06	76.26	73.23	73.86	70.66	69.04	70.12	75.29	75.54	77.60	72.15	68.99	67.98	66.85
Days of sales outstanding (DSO)	days	67.81	66.66	66.96	66.27	69.43	71.51	68.16	63.66	65.03	63.54	64.12	64.56	68.30	70.13	72.10	64.87	61.48	76.72	75.78	73.76
Number of days of payables	days	36.08	30.37	33.28	34.84	41.72	34.41	34.81	34.57	36.11	32.48	31.15	30.01	34.24	30.33	32.04	29.33	34.05	32.55	33.05	32.40
Cash conversion cycle	days	109.84	123.60	121.75	119.63	110.67	120.82	113.40	105.35	102.15	104.92	103.64	103.59	104.18	115.09	115.60	113.14	99.57	113.15	110.71	108.20

April 26, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.11 + 67.81 – 36.08
= 109.84

The cash conversion cycle of Medtronic PLC fluctuated over the past several quarters, ranging from 99.57 days to 123.60 days. This metric reflects the time it takes for the company to convert its resources into cash through the sales of goods and services, managing inventory, and collecting receivables, while considering the time it takes to pay suppliers.

A shorter cash conversion cycle indicates efficient management of working capital, enabling the company to generate cash quickly. Conversely, a longer cycle may suggest inefficiencies in operations or difficulties in collecting receivables.

Medtronic's trend shows some variability, potentially influenced by factors such as seasonality, changes in sales volume, or alterations in payment terms. Analyzing the underlying reasons behind these fluctuations can provide insights into the company's operational and financial performance over time. Additionally, comparisons with industry benchmarks or competitors can help assess Medtronic's efficiency in managing its working capital.