Neogen Corporation (NEOG)

Cash conversion cycle

		May 31, 2025	Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	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
Days of inventory on hand (DOH)	days	147.19	161.61	155.56	157.54	150.07	146.11	129.06	111.97	117.27	140.79	148.92	164.72	157.12	148.46	144.33	141.88	145.05	150.33	145.14	156.42
Days of sales outstanding (DSO)	days	62.58	64.49	65.54	67.08	68.32	68.19	59.79	54.67	68.01	74.14	82.59	63.98	69.01	65.96	67.13	65.36	71.54	70.75	67.34	66.55
Number of days of payables	days	61.39	56.83	62.43	48.76	65.86	71.89	90.19	71.79	67.19	59.20	86.74	34.47	44.46	30.83	46.12	31.15	34.43	35.22	32.47	36.13
Cash conversion cycle	days	148.38	169.27	158.67	175.86	152.54	142.40	98.66	94.85	118.09	155.73	144.77	194.23	181.67	183.59	165.33	176.10	182.17	185.86	180.01	186.84

May 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 147.19 + 62.58 – 61.39
= 148.38

The cash conversion cycle (CCC) of Neogen Corporation has exhibited significant fluctuations over the analyzed periods. Starting from 186.84 days as of August 31, 2020, the cycle demonstrated relative stability through early 2021, with values ranging narrowly around the 180-day mark, reaching 182.17 days by May 31, 2021. From this point onward, a gradual decline is observable, with notable reductions to 165.33 days by November 30, 2021, and then approximately stabilizing around the 180-day range during early 2022.

In the subsequent period, the CCC experienced considerable variability, including an upward spike to 194.23 days as of August 31, 2022, followed by a sharp decline to 144.77 days by November 30, 2022. This rapid decrease indicates an improvement in working capital efficiency, subsequently trending upward again to 155.73 days by February 28, 2023.

From May 31, 2023, onward, the cycle demonstrated a consistent decreasing trend, reaching its lowest recorded value of 94.85 days on August 31, 2023. This indicates enhanced operational efficiency, likely reflecting quicker inventory turnover, faster receivables collection, and optimized payables periods. The cycle then experienced fluctuations, rising slightly to 98.66 days in November 2023, then increasing again toward 142.40 days by February 29, 2024. In the latest period, the cycle slightly decreased to 148.38 days as of May 31, 2025.

Overall, the data depict a trend toward shorter cash conversion cycles in 2023, which suggests improved efficiency in managing receivables, inventory, and payables. Such reductions generally imply a more effective working capital management, potentially supporting enhanced cash flow and operational liquidity. However, the fluctuations within the period highlight some variability in operational performance, requiring ongoing analysis to determine underlying causes.