ePlus inc (PLUS)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 22.85 | 21.59 | 19.57 | 30.35 | 49.43 | 47.13 | 54.47 | 57.28 | 58.53 | 70.70 | 64.65 | 41.61 | 42.18 | 39.91 | 23.08 | 21.74 | 24.84 | 22.61 | 29.24 | 15.33 |
| Days of sales outstanding (DSO) | days | 167.57 | 166.76 | 123.43 | 130.41 | 127.87 | 137.76 | 140.04 | 114.64 | 153.30 | 121.99 | 118.53 | 108.35 | 139.81 | 131.18 | 125.96 | 125.42 | 143.36 | 115.85 | 126.70 | 110.70 |
| Number of days of payables | days | 72.25 | 64.86 | 59.41 | 68.60 | 66.80 | 62.78 | 78.34 | 51.84 | 71.64 | 49.51 | 43.42 | 36.54 | 46.44 | 35.97 | 44.44 | 51.32 | 48.63 | 32.16 | 42.77 | 25.28 |
| Cash conversion cycle | days | 118.17 | 123.49 | 83.59 | 92.17 | 110.49 | 122.12 | 116.17 | 120.09 | 140.19 | 143.17 | 139.77 | 113.42 | 135.55 | 135.11 | 104.60 | 95.84 | 119.57 | 106.30 | 113.17 | 100.74 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.85 + 167.57 – 72.25
= 118.17
The cash conversion cycle is an important metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash received from sales. For ePlus inc, the trend of the cash conversion cycle from March 31, 2020, to December 31, 2024, shows fluctuations over time.
At the beginning of the period, the cash conversion cycle stood at around 100 days, indicating that the company took approximately 100 days to convert its investments into cash. Over time, the cash conversion cycle increased, reaching its peak at around 143 days by September 30, 2022. This suggests that the company's efficiency in managing its working capital deteriorated during this period.
Subsequently, there was a gradual decline in the cash conversion cycle, with the company improving its working capital management. By December 31, 2024, the cash conversion cycle decreased to around 118 days, indicating that the company was able to convert its investments into cash more efficiently compared to the peak in 2022.
Overall, a lower cash conversion cycle is generally considered better as it indicates that the company is managing its working capital effectively, resulting in quicker cash flows. Conversely, a higher cash conversion cycle may signal inefficiencies in inventory management, accounts receivable, or accounts payable process. In the case of ePlus inc, the fluctuations in the cash conversion cycle highlight the importance of monitoring working capital management practices to ensure optimal efficiency and cash flow generation.
Peer comparison
Dec 31, 2024