Photronics Inc (PLAB)

Cash conversion cycle

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Days of inventory on hand (DOH)	days	32.64	29.01	31.00	36.08	39.20
Days of sales outstanding (DSO)	days	97.75	90.56	86.11	107.48	90.49
Number of days of payables	days	45.46	48.79	48.60	53.24	51.59
Cash conversion cycle	days	84.94	70.78	68.52	90.32	78.10

October 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.64 + 97.75 – 45.46
= 84.94

The cash conversion cycle of Photronics Inc has fluctuated over the past five years. In the most recent fiscal year 2024, the company's cash conversion cycle increased to 84.94 days from 70.78 days in 2023, indicating a slower conversion of investment in inventory into cash. This increase suggests the company may be taking longer to sell its inventory or collect receivables.

Comparing to the previous years, the cash conversion cycle was also higher than in 2022 and 2020 but lower than in 2021. The company's cash conversion cycle was at its highest level in 2021 at 90.32 days but improved in subsequent years.

Overall, monitoring the cash conversion cycle is essential for Photronics Inc to assess its efficiency in managing working capital and optimizing cash flow. Further analysis and scrutiny of the underlying reasons for changes in the cash conversion cycle can provide insights into the company's operational performance and financial health.