Photronics Inc (PLAB)

Cash conversion cycle

		Oct 31, 2024	Jul 28, 2024	Apr 28, 2024	Jan 28, 2024	Oct 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 31, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 31, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020
Days of inventory on hand (DOH)	days	32.64	32.14	31.43	29.26	29.01	32.98	32.86	42.48	41.33	40.94	48.40	39.70	36.08	35.50	38.19	38.88	39.20	37.46	39.95	35.29
Days of sales outstanding (DSO)	days	97.75	92.74	89.72	93.39	90.56	86.06	89.13	94.70	86.10	92.32	—	86.98	107.48	—	—	84.51	90.40	—	—	—
Number of days of payables	days	45.46	51.57	54.88	50.19	48.79	60.46	55.43	68.25	64.80	66.91	65.44	60.80	53.24	50.51	56.41	48.85	51.59	64.70	53.50	60.18
Cash conversion cycle	days	84.94	73.31	66.27	72.46	70.79	58.57	66.56	68.93	62.63	66.35	-17.04	65.87	90.32	-15.01	-18.22	74.54	78.01	-27.24	-13.55	-24.89

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 few quarters. On average, the company takes approximately 65 days to convert its investments in inventory and other resources into cash inflows from sales.

The trend has shown some volatility, with the cycle ranging from -27.24 days to 90.32 days in the past eight quarters. A positive cash conversion cycle indicates that the company takes a longer time to collect on its sales than it takes to pay its suppliers, potentially leading to working capital inefficiencies.

The negative cash conversion cycle observed in some quarters suggests that the company is able to collect cash from sales before paying suppliers, which could be a sign of strong working capital management. However, it's important to assess the underlying reasons for these swings and ensure they are sustainable in the long term.

Overall, monitoring the cash conversion cycle is crucial for understanding how efficiently the company manages its working capital, inventory, and accounts receivables, and can provide valuable insights into its liquidity and operational efficiency.