Premier Inc (PINC)
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 | — | 63.55 | 63.85 | 79.72 | 72.84 |
| Days of sales outstanding (DSO) | days | 150.46 | 125.39 | 113.24 | 95.32 | 86.68 |
| Number of days of payables | days | 26.59 | 48.07 | 45.13 | 29.73 | 35.27 |
| Cash conversion cycle | days | 123.87 | 140.87 | 131.96 | 145.30 | 124.24 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 150.46 – 26.59
= 123.87
The cash conversion cycle (CCC) for Premier Inc has exhibited fluctuations over the period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the CCC was 124.24 days, indicating that, on average, it took approximately 124 days for the company to convert its investments in inventory and other resources into cash flows from sales. This duration increased significantly by June 30, 2022, reaching 145.30 days, implying a longer period to convert resources into cash, which could be indicative of extended receivables, inventory holding periods, or delays in collection and inventory turnover.
Subsequently, the CCC decreased to 131.96 days by June 30, 2023, reflecting some improvement in managing the working capital cycle. However, the cycle lengthened once again to 140.87 days by June 30, 2024, suggesting a temporary setback or inefficiencies in receivables, inventory, or payables management during that period.
Finally, by June 30, 2025, the CCC decreased to 123.87 days, indicating an overall reduction from the previous year and approaching the cycle length observed at the start of the period. This decline suggests that the company's working capital management was somewhat optimized, resulting in a shorter duration to convert investments into cash.
Overall, the trend in Premier Inc’s cash conversion cycle shows cyclical variations, with periods of elongation potentially driven by operational challenges or strategic decisions affecting receivable collection times and inventory turnover. The recent improvement indicates a move towards more efficient working capital management, although the cycle remains relatively elevated compared to initial levels.
Peer comparison
Jun 30, 2025