Nordson Corporation (NDSN)
Cash conversion cycle
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 82.10 | 71.94 | 66.18 | 55.09 | 58.58 |
| Days of sales outstanding (DSO) | days | 83.98 | 76.36 | 76.46 | 82.47 | 90.27 |
| Number of days of payables | days | 19.19 | 18.63 | 18.55 | 14.11 | 17.60 |
| Cash conversion cycle | days | 146.89 | 129.67 | 124.10 | 123.45 | 131.25 |
October 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.10 + 83.98 – 19.19
= 146.89
The cash conversion cycle of Nordson Corp. has exhibited fluctuations over the past five years. In 2023, the cash conversion cycle increased to 187.75 days from 164.83 days in 2022. This rise suggests a reduction in efficiency in converting resources into cash. Comparatively, the cycle was longer in 2021 at 158.42 days and 2020 at 157.13 days. However, it was slightly higher in 2019 at 160.50 days. The increasing trend from 2020 to 2023 may indicate potential challenges in managing inventory, collecting receivables, and settling payables efficiently. It's important for the company to closely monitor and address this trend to enhance its working capital management and overall financial performance.
Peer comparison
Oct 31, 2023