Neogen Corporation (NEOG)

Cash conversion cycle

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Days of inventory on hand (DOH)	days	150.07	117.27	157.12	145.05	156.36
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	150.07	117.27	157.12	145.05	156.36

May 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 150.07 + — – —
= 150.07

The cash conversion cycle of Neogen Corporation has shown fluctuation over the past five years.

On May 31, 2020, the company had a cash conversion cycle of 156.36 days. This suggests that the company took approximately 156.36 days to convert its investments in inventory and other resources into cash flows from sales.

In the following year, on May 31, 2021, the cash conversion cycle improved to 145.05 days, indicating more efficiency in converting its resources into cash.

However, on May 31, 2022, the cash conversion cycle increased to 157.12 days, suggesting a delay in converting resources into cash flows, which could impact the company's liquidity and working capital management.

On May 31, 2023, there was a significant improvement in the cash conversion cycle, reducing to 117.27 days. This improvement suggests that Neogen Corporation was able to convert its resources into cash more effectively during that period.

By May 31, 2024, the cash conversion cycle increased again to 150.07 days, indicating a longer period required to convert resources into cash compared to the previous year.

Overall, Neogen Corporation's cash conversion cycle has shown variability over the analyzed period, with fluctuations that may reflect changes in the company's operational efficiency, inventory management, and accounts receivable collection processes. It is important for the company to monitor and manage its cash conversion cycle effectively to ensure optimal liquidity and working capital management in the future.