Prestige Brand Holdings Inc (PBH)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	101.08	106.83	115.85	121.53	117.78	118.47	106.25	103.24	94.23	86.43	91.76	93.84	105.99	106.11	102.34	104.44	103.09	109.04	114.06	116.63
Days of sales outstanding (DSO)	days	57.34	56.09	51.32	51.02	54.06	51.71	48.10	48.50	46.79	46.34	52.34	48.39	44.37	44.25	46.48	42.70	57.05	55.36	54.64	54.69
Number of days of payables	days	28.40	28.27	31.88	41.40	45.58	48.02	42.49	44.85	43.66	32.62	32.35	27.53	42.39	26.40	49.74	28.93	55.42	45.29	58.62	55.98
Cash conversion cycle	days	130.01	134.64	135.29	131.15	126.25	122.16	111.86	106.89	97.36	100.15	111.75	114.70	107.97	123.96	99.08	118.21	104.72	119.11	110.08	115.33

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 shown some fluctuations over the past few quarters. The trend indicates an upward movement from the end of 2019 to mid-2022, followed by a slight decline towards early 2024.

On average, Prestige Brand Holdings Inc takes around 120 days to convert its investments in inventory and other resources into cash receipts from customers. A shorter cash conversion cycle is generally preferred as it indicates quicker turnover of resources and efficient management of working capital.

The company's cash conversion cycle reached its peak in late 2023 at 135.29 days, suggesting potential inefficiencies in managing inventory, collecting receivables, or paying suppliers. However, there has been a recent improvement as of March 31, 2024, with the cycle decreasing to 130.01 days.

It would be beneficial for Prestige Brand Holdings Inc to analyze the specific components of the cash conversion cycle to identify areas for improvement and work towards optimizing the cycle further. This could involve streamlining inventory management, enhancing accounts receivable collection processes, and negotiating favorable payment terms with suppliers.