Premier Inc (PINC)
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 | 63.55 | 63.85 | 79.72 | 72.84 | 59.88 |
Days of sales outstanding (DSO) | days | 34.35 | 31.50 | 29.07 | 30.00 | 37.93 |
Number of days of payables | days | 48.07 | 45.13 | 29.73 | 35.27 | 46.25 |
Cash conversion cycle | days | 49.83 | 50.22 | 79.05 | 67.56 | 51.56 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.55 + 34.35 – 48.07
= 49.83
Premier Inc's cash conversion cycle has fluctuated over the past five years. In the most recent fiscal year ending June 30, 2024, the company's cash conversion cycle improved to 49.83 days compared to the prior year at 50.22 days. This indicates that the company is managing its cash flow more efficiently by reducing the time it takes to convert its investments in inventory and other resources into cash receipts from sales.
Looking back over the five-year period, the company experienced a significant increase in its cash conversion cycle in the fiscal year ending June 30, 2022, reaching 79.05 days. This suggests potential challenges in managing working capital effectively during that period. However, Premier Inc was able to bring down its cash conversion cycle to 67.56 days in the following year, demonstrating efforts to streamline operations and enhance liquidity.
Overall, Premier Inc's trend in the cash conversion cycle shows some variability, but the recent improvement indicates a positive development in the company's working capital management. Monitoring this metric over time can provide insights into the company's efficiency in managing its resources and cash flow.
Peer comparison
Jun 30, 2024