Neogen Corporation (NEOG)

Cash conversion cycle

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	71.36	64.00	54.87	58.81	72.60	79.80	97.60	96.34	92.75	91.83	92.34	94.75	98.02	94.88	101.76	100.59	93.93	91.79	93.16	91.67
Days of sales outstanding (DSO)	days	34.86	30.50	28.26	35.13	38.13	42.44	31.99	34.51	37.64	44.32	43.60	48.38	47.21	38.52	38.16	42.50	40.46	43.07	39.98	41.95
Number of days of payables	days	35.11	44.73	35.18	33.70	30.53	46.48	20.42	27.26	19.26	29.35	20.27	22.49	22.97	21.22	23.50	27.14	19.99	20.79	19.49	20.32
Cash conversion cycle	days	71.11	49.78	47.95	60.24	80.20	75.76	109.17	103.58	111.13	106.81	115.67	120.64	122.27	112.18	116.41	115.95	114.40	114.07	113.65	113.29

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 71.36 + 34.86 – 35.11
= 71.11

The cash conversion cycle of Neogen Corporation has varied over the past 20 periods, ranging from a low of 47.95 days to a high of 122.27 days. The cash conversion cycle represents the time it takes for the company to convert its investments in raw materials into sales revenue and then into cash inflows.

A lower cash conversion cycle indicates that the company is efficiently managing its working capital, as it is able to quickly convert its investments into cash. Conversely, a higher cash conversion cycle may suggest inefficiencies in the company's operations.

It is noteworthy that the cash conversion cycle has fluctuated over time, indicating potential changes in the company's operations or market conditions. Monitoring the trend of the cash conversion cycle can provide insights into the company's liquidity, efficiency, and overall financial health.