Mesa Laboratories Inc (MLAB)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	143.80	158.23	142.14	151.38	148.08	195.48	151.52	169.47	174.47	133.80	84.80	179.51	86.95	88.88	82.35	90.82	77.88	143.64	59.54	60.13
Days of sales outstanding (DSO)	days	65.94	61.77	62.07	59.25	70.89	94.65	93.11	108.32	119.94	83.29	57.82	54.07	64.82	57.23	53.07	53.93	65.54	64.76	42.53	45.33
Number of days of payables	days	26.59	20.03	20.79	23.79	26.22	36.43	41.82	47.65	55.99	44.15	31.23	29.51	34.79	27.86	12.88	19.80	23.74	28.87	20.34	27.00
Cash conversion cycle	days	183.15	199.97	183.42	186.84	192.75	253.70	202.81	230.13	238.41	172.93	111.38	204.07	116.98	118.24	122.54	124.96	119.67	179.52	81.73	78.46

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 143.80 + 65.94 – 26.59
= 183.15

The cash conversion cycle of Mesa Laboratories Inc has shown fluctuation over the past several quarters. The cycle represents the time it takes for the company to convert its investments in inventory into cash from sales.

In the most recent quarter, as of March 31, 2024, the cash conversion cycle stands at 183.15 days. This indicates that Mesa Laboratories Inc takes approximately 183 days to convert its inventory into cash received from customers. The cycle has decreased compared to the previous quarter, which had a cycle of 199.97 days as of December 31, 2023.

Analyzing further back, the trend shows variability in the cash conversion cycle over the past few quarters. The cycle peaked at 253.70 days as of December 31, 2022, which may suggest inefficiencies in inventory management and collection processes. However, there have been periods of improvement, such as the cycle of 78.46 days as of September 30, 2019, indicating a more efficient conversion of inventory to cash.

Overall, Mesa Laboratories Inc should focus on optimizing its inventory management and collection processes to reduce the cash conversion cycle further, ultimately improving its cash flow efficiency and working capital management.