Prestige Brand Holdings Inc (PBH)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	101.08	117.78	94.23	105.99	103.09
Days of sales outstanding (DSO)	days	57.34	54.06	46.79	44.37	57.05
Number of days of payables	days	28.40	45.58	43.66	42.39	55.42
Cash conversion cycle	days	130.01	126.25	97.36	107.97	104.72

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 101.08 + 57.34 – 28.40
= 130.01

The cash conversion cycle of Prestige Brand Holdings Inc has fluctuated over the past five years, ranging from 97.36 days in 2022 to 130.01 days in 2024. This metric indicates the average number of days it takes for the company to convert its investments in inventory and other resources into cash from sales. A longer cash conversion cycle suggests that the company takes more time to generate cash from its operating activities.

In 2024, the cash conversion cycle increased to 130.01 days, indicating a slower cash conversion process compared to the previous year. This may be attributed to factors such as extended payment terms for suppliers, increased inventory holdings, or challenges in collecting receivables.

On the contrary, in 2022, the cash conversion cycle improved to 97.36 days, reflecting a more efficient cash conversion process. This could be due to better inventory management, faster collection of receivables, or improved payment terms with suppliers.

Overall, monitoring the trend of the cash conversion cycle can provide insights into the efficiency of Prestige Brand Holdings Inc's working capital management and operational performance. Any deviations from the historical averages should be carefully analyzed to understand the underlying reasons and potential impact on the company's financial health.