OSI Systems Inc (OSIS)

Cash conversion cycle

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	131.99	144.05	145.50	160.61	147.71
Days of sales outstanding (DSO)	days	178.49	153.74	108.73	95.00	92.50
Number of days of payables	days	91.19	69.20	59.84	60.23	70.92
Cash conversion cycle	days	219.29	228.60	194.40	195.39	169.29

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 131.99 + 178.49 – 91.19
= 219.29

The cash conversion cycle (CCC) of OSI Systems Inc has exhibited notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. Beginning at approximately 169.29 days in 2021, the CCC increased markedly in 2022 to approximately 195.39 days, reflecting a lengthening of the period required to convert investments in inventory and other resources into cash flows from sales. This upward trend continued into 2023, with the cycle slightly decreasing to around 194.40 days, suggesting a marginal improvement, yet remaining significantly elevated compared to 2021 levels.

By June 30, 2024, the CCC reached approximately 228.60 days, signifying a substantial extension of the cycle, and implying that the company's cash conversion process was taking longer than in previous years. This could indicate rising operational inefficiencies, increased inventory holding periods, or extended receivables collection periods. In the subsequent year, 2025, the cycle decreased to approximately 219.29 days, reflecting a partial reduction, but still remaining considerably higher than the cycle in 2021.

Overall, the trend demonstrates a prolonged cash conversion cycle over the analyzed period, with peaks in 2024. The increase in cycle length suggests that OSI Systems Inc experienced challenges in swiftly converting its inventory and receivables into cash, potentially impacting liquidity and operational efficiency. The partial reduction observed in 2025 indicates some effort toward normalization, yet the cycle remains elevated relative to initial levels, warranting ongoing scrutiny of the company's working capital management.