O’Reilly Automotive Inc (ORLY)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	228.11	223.50	219.76	223.94	220.61	221.46	226.54	228.52	226.39	222.29	221.77	217.79	213.32	217.96	222.88	228.41	241.61	241.99	255.68	270.20
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	228.11	223.50	219.76	223.94	220.61	221.46	226.54	228.52	226.39	222.29	221.77	217.79	213.32	217.96	222.88	228.41	241.61	241.99	255.68	270.20

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 228.11 + — – —
= 228.11

The cash conversion cycle of O’Reilly Automotive Inc has shown a decreasing trend overall from 270.20 days on March 31, 2020, to 228.11 days on December 31, 2024. The company has effectively managed its working capital to improve its cash conversion cycle efficiency over the years.

In general, a shorter cash conversion cycle indicates that O’Reilly Automotive Inc is collecting its receivables faster, paying its suppliers later, and converting inventory into sales quicker. This can be seen as a positive sign of efficient operations and effective management of cash flow.

However, the slight increase in the cash conversion cycle from 217.96 days on September 30, 2021, to 228.52 days on March 31, 2023, suggests a temporary slowdown in the company's efficiency in managing its working capital during that period. It's important for the company to monitor and address any factors contributing to this increase to maintain a healthy cash conversion cycle in the future.

Overall, O’Reilly Automotive Inc's cash conversion cycle reflects a generally positive trend, indicating effective working capital management and operational efficiency.