Premier Inc (PINC)
Cash conversion cycle
| Jun 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.55 | 62.85 | 61.39 | 58.48 | 63.85 | 76.84 | 88.39 | 89.26 | 79.72 | 68.62 | 66.41 | 69.72 | 72.84 | 108.09 | 107.50 | 105.89 | 59.88 | 45.08 | 51.20 | 52.56 |
| Days of sales outstanding (DSO) | days | 34.35 | 33.09 | 33.92 | 27.80 | 31.50 | 31.49 | 32.40 | 27.80 | 29.07 | 29.14 | 29.68 | 29.19 | 30.00 | 43.48 | 41.97 | 35.79 | 37.93 | 40.11 | 49.15 | 46.93 |
| Number of days of payables | days | 48.07 | 54.41 | 45.77 | 40.63 | 45.13 | 43.52 | 46.63 | 43.09 | 29.73 | 28.30 | 31.55 | 36.93 | 35.27 | 48.16 | 56.97 | 50.40 | 46.25 | 57.88 | 51.74 | 57.61 |
| Cash conversion cycle | days | 49.83 | 41.54 | 49.54 | 45.64 | 50.22 | 64.81 | 74.16 | 73.97 | 79.05 | 69.46 | 64.54 | 61.98 | 67.56 | 103.42 | 92.50 | 91.28 | 51.56 | 27.31 | 48.62 | 41.88 |
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 shown fluctuation over the past few quarters. The cash conversion cycle measures how efficiently a company manages its working capital. A shorter cycle indicates better management of cash flow and working capital.
Looking at the data, we can see that Premier Inc's cash conversion cycle ranged from a low of 27.31 days in Q3 2019 to a high of 103.42 days in Q1 2021. This indicates variability in the company's ability to convert its investments in inventory and accounts receivable into cash.
In recent quarters, there has been a trend towards a shorter cash conversion cycle, which is a positive sign as it suggests improved efficiency in managing cash flow and working capital. However, it is important to monitor this metric closely to ensure that the trend continues and does not reverse in the future.
Overall, Premier Inc should continue to focus on optimizing its cash conversion cycle to enhance its liquidity position and maximize profitability. Tracking this metric over time will help the company better understand its working capital management and identify areas for improvement.
Peer comparison
Jun 30, 2024