Phibro Animal Health Corporation (PAHC)

Cash conversion cycle

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Days of inventory on hand (DOH)	days	98.53	110.64	108.45	140.49	132.08
Days of sales outstanding (DSO)	days	62.23	62.15	64.97	64.32	57.70
Number of days of payables	days	31.71	29.44	40.01	44.40	44.39
Cash conversion cycle	days	129.06	143.35	133.42	160.41	145.39

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.53 + 62.23 – 31.71
= 129.06

The cash conversion cycle of Phibro Animal Health Corporation has exhibited fluctuations over the past five years. As of June 30, 2024, the company's cash conversion cycle stood at 129.06 days, showing an improvement compared to the previous year. This indicates that the company is managing its cash flows more efficiently in converting its investments in raw materials into cash receipts from sales.

The trend of the cash conversion cycle is somewhat volatile, with variations observed from year to year. Despite some fluctuations, the company has shown an ability to operate with a relatively shorter cash conversion cycle in recent years compared to the figures recorded in 2021 and 2020. This suggests improvements in inventory turnover, accounts receivable collection, and accounts payable management.

Overall, the downward trend in the cash conversion cycle from 2021 to 2024 reflects the company's efforts to streamline its operations and enhance working capital management. However, it would be beneficial for Phibro Animal Health Corporation to continue monitoring and optimizing its cash conversion cycle to ensure sustained efficiency in its cash flow management.