ePlus inc (PLUS)
Cash conversion cycle
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.45 | 57.28 | 41.61 | 21.74 | 15.33 |
| Days of sales outstanding (DSO) | days | 130.25 | 114.64 | 108.35 | 125.42 | 110.70 |
| Number of days of payables | days | 68.81 | 51.84 | 36.54 | 51.32 | 25.28 |
| Cash conversion cycle | days | 91.89 | 120.09 | 113.42 | 95.84 | 100.74 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.45 + 130.25 – 68.81
= 91.89
ePlus inc's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash. A lower cash conversion cycle is generally favorable as it indicates that the company is able to efficiently manage its working capital.
Looking at the data provided:
- In the fiscal year ending March 31, 2024, ePlus inc's cash conversion cycle improved significantly to 67.37 days from 94.43 days in the previous year, signaling a more efficient management of working capital.
- This improvement follows a trend where the company's cash conversion cycle decreased steadily from 91.34 days in March 31, 2022, to 61.55 days in March 31, 2021, before increasing to 76.22 days in March 31, 2020.
- The overall trend suggests that ePlus inc has been actively working to streamline its operational efficiency and enhance its cash flow management in recent years.
It is important for stakeholders to monitor changes in the cash conversion cycle as it can provide insights into the company's ability to generate cash from its operating activities and manage its liquidity effectively. The decreasing trend in ePlus inc's cash conversion cycle indicates a positive development in its working capital management, which could potentially lead to improved financial performance and shareholder value in the future.
Peer comparison
Mar 31, 2024