Mesa Laboratories Inc (MLAB)

Cash conversion cycle

		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	Mar 31, 2020
Days of inventory on hand (DOH)	days	105.14	114.73	124.29	134.89	158.23	142.14	151.38	148.08	141.93	112.08	120.14	119.36	133.80	84.80	88.44	86.27	87.99	81.38	89.55	98.46
Days of sales outstanding (DSO)	days	59.33	64.30	58.03	65.94	61.77	62.07	59.25	70.89	69.59	68.50	76.41	81.63	83.29	57.82	54.07	64.82	57.23	53.07	53.93	65.54
Number of days of payables	days	15.28	23.10	22.14	24.94	20.03	20.79	23.79	26.22	26.45	30.93	33.78	38.31	44.15	31.23	29.51	34.52	27.58	12.73	19.52	23.58
Cash conversion cycle	days	149.19	155.93	160.18	175.89	199.97	183.42	186.84	192.75	185.07	149.65	162.76	162.68	172.93	111.38	112.99	116.57	117.63	121.72	123.96	140.42

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 105.14 + 59.33 – 15.28
= 149.19

The cash conversion cycle of Mesa Laboratories Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash flows from sales.

In general, a shorter cash conversion cycle indicates a more efficient management of working capital and liquidity. Mesa Laboratories Inc has seen a declining trend in its cash conversion cycle from around 140 days in March 2020 to approximately 149 days in September 2022. This suggests that the company was able to manage its inventory and receivables more efficiently during this period.

However, from December 31, 2022, to December 31, 2024, there was an increase in the cash conversion cycle, reaching a peak of around 200 days. This increase may signal potential issues in managing working capital, which could lead to cash flow challenges and inefficiencies in the company's operations.

Overall, Mesa Laboratories Inc should closely monitor its cash conversion cycle and strive to optimize its inventory levels and accounts receivable collection processes to ensure efficient working capital management and sustained financial health.