Nordson Corporation (NDSN)
Cash conversion cycle
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 82.93 | 77.41 | 79.21 | 80.94 | 82.10 | 80.73 | 80.88 | 83.43 | 71.94 | 77.28 | 74.86 | 72.67 | 66.18 | 59.33 | 58.58 | 56.38 | 55.09 | 64.33 | 64.70 | 60.57 |
| Days of sales outstanding (DSO) | days | 81.97 | 75.70 | 75.26 | 76.03 | 83.93 | 76.27 | 74.84 | 77.81 | 76.38 | 78.00 | 73.88 | 70.23 | 76.46 | 81.96 | 78.40 | 78.04 | 82.19 | 85.69 | 81.00 | 79.79 |
| Number of days of payables | days | 17.01 | 17.37 | 18.43 | 18.50 | 19.19 | 19.29 | 15.69 | 16.88 | 18.63 | 19.42 | 18.94 | 19.14 | 18.55 | 18.14 | 16.80 | 14.80 | 14.11 | 14.78 | 16.54 | 16.05 |
| Cash conversion cycle | days | 147.89 | 135.74 | 136.04 | 138.46 | 146.84 | 137.71 | 140.02 | 144.36 | 129.70 | 135.86 | 129.80 | 123.76 | 124.09 | 123.15 | 120.18 | 119.62 | 123.16 | 135.24 | 129.16 | 124.31 |
October 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.93 + 81.97 – 17.01
= 147.89
The cash conversion cycle of Nordson Corporation has shown some fluctuations over the past several reporting periods. The cycle represents the time taken by the company to convert its investments in inventory into cash flows from sales. A longer cash conversion cycle indicates that the company takes more time to recover its investment in inventory.
From the data provided, we can see that the cash conversion cycle has ranged from a low of 119.62 days to a high of 147.89 days. The company's management of inventory, accounts receivable, and accounts payable has played a significant role in shaping these figures.
It is important to note that a decreasing trend in the cash conversion cycle is generally positive as it signifies that the company is improving its operational efficiency and turning inventory into sales more quickly. Conversely, an increasing trend could indicate issues with inventory management or challenges in collecting receivables.
Overall, by closely monitoring and analyzing the cash conversion cycle, investors and stakeholders can gain valuable insights into Nordson Corporation's working capital management and operational performance. The company's ability to efficiently manage its cash conversion cycle can have implications for its liquidity, profitability, and overall financial health.
Peer comparison
Oct 31, 2024