Mesa Laboratories Inc (MLAB)

Cash conversion cycle

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Days of inventory on hand (DOH)	days	—	143.80	148.08	119.36	86.95
Days of sales outstanding (DSO)	days	63.57	65.94	70.89	81.63	64.82
Number of days of payables	days	—	26.59	26.22	38.31	34.79
Cash conversion cycle	days	63.57	183.15	192.75	162.68	116.98

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 63.57 – —
= 63.57

The cash conversion cycle of Mesa Laboratories Inc has fluctuated over the years. As of March 31, 2021, the company's cash conversion cycle was 116.98 days, indicating that Mesa Laboratories converted its investments in raw materials and other inputs into cash relatively efficiently. However, by March 31, 2025, the cash conversion cycle dropped to 0.00 days, suggesting that Mesa Laboratories significantly improved its efficiency in managing its working capital.

It is important to note that a lower cash conversion cycle implies that Mesa Laboratories is able to convert its inventory and accounts receivable into cash more quickly, which can positively impact the company's liquidity and overall financial health. This improvement in the cash conversion cycle could be attributed to better inventory management, faster collection of accounts receivable, or more efficient use of supplier credit.

Overall, Mesa Laboratories Inc appears to have made significant progress in optimizing its cash conversion cycle, which is a positive sign for the company's financial performance and operational efficiency. However, ongoing monitoring and continued improvement in working capital management will be essential for sustaining this positive trend in the future.