Palo Alto Networks Inc (PANW)
Cash conversion cycle
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 64.83 | — | — |
| Days of sales outstanding (DSO) | days | 145.64 | 152.07 | 151.03 | 142.15 | 106.38 |
| Number of days of payables | days | 37.05 | 20.61 | 25.29 | 27.18 | 16.29 |
| Cash conversion cycle | days | 108.59 | 131.46 | 190.57 | 114.96 | 90.09 |
July 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 145.64 – 37.05
= 108.59
The cash conversion cycle (CCC) of Palo Alto Networks Inc. over the period from July 31, 2021, to July 31, 2025, exhibits notable fluctuations.
In July 2021, the CCC stood at approximately 90.09 days, indicating the average number of days it took for the company to convert its investments in inventory and other resources into cash flows from sales was just over three months. By July 31, 2022, the CCC increased significantly to approximately 114.96 days, reflecting a lengthening of the cycle by roughly 25 days.
This upward trend continued markedly, with the CCC peaking at approximately 190.57 days as at July 31, 2023. This substantial increase suggests that the company experienced delays or inefficiencies in its receivables collection, inventory management, or payables management during this period, resulting in a longer duration to convert resources into cash.
Subsequently, a reduction was observed in the following years, with the CCC decreasing to approximately 131.46 days by July 31, 2024, and further to 108.59 days by July 31, 2025. These reductions indicate a trend toward improving operational efficiency and liquidity management, shortening the period required to convert inputs into cash.
Overall, the data reveals a volatile trend in Palo Alto Networks Inc.'s cash conversion cycle, with a significant elongation reaching a peak in mid-2023, followed by a recovery phase. The fluctuations may reflect changes in credit policies, customer payment behavior, inventory turnover strategies, or supplier terms during the observed period. The recent downward trend suggests ongoing efforts to optimize cash flow management and operational efficiency.