ePlus inc (PLUS)
Cash conversion cycle
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 29.31 | 30.45 | 57.28 | 41.61 | 21.74 |
| Days of sales outstanding (DSO) | days | 89.49 | 130.25 | 114.64 | 108.35 | 125.42 |
| Number of days of payables | days | 109.95 | 68.81 | 51.84 | 36.54 | 51.32 |
| Cash conversion cycle | days | 8.86 | 91.89 | 120.09 | 113.42 | 95.84 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.31 + 89.49 – 109.95
= 8.86
The cash conversion cycle of ePlus inc has shown varying trends over the years. As of March 31, 2021, the cash conversion cycle stood at 95.84 days, indicating that it took the company approximately 95.84 days to convert its investments in inventory into cash receipts from customers.
However, there was a noticeable increase in the cash conversion cycle to 113.42 days by March 31, 2022, signaling a potential slowdown in the company's cash conversion efficiency. This increase may suggest challenges in managing inventory, collecting receivables, or extending payment terms to suppliers.
By March 31, 2023, the cash conversion cycle continued to extend to 120.09 days, reaching its highest point in the data set. This further elongation may raise concerns about liquidity management and operational efficiency, as the company takes longer to convert its investments into cash.
A significant improvement was noted by March 31, 2024, with the cash conversion cycle decreasing to 91.89 days. This reduction indicates enhanced efficiency in managing working capital, possibly through better inventory management or quicker collection of receivables.
The most striking change occurred by March 31, 2025, where the cash conversion cycle plummeted to just 8.86 days. This sharp decline suggests a remarkable improvement in the company's ability to quickly convert its investments into cash, signaling enhanced operational efficiency and potentially more effective working capital management.
Overall, the fluctuations in ePlus inc's cash conversion cycle over the years highlight the company's evolving working capital management practices and efficiency in converting investments into cash. Keeping a close eye on this metric can provide valuable insights into the company's liquidity position and operational effectiveness.
Peer comparison
Mar 31, 2025