Plexus Corp (PLXS)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	126.00	138.75	144.16	146.58	141.78	145.72	148.66	154.39	205.05	219.82	205.70	272.92	149.84	131.38	114.35	113.08	111.64	183.08	176.18	114.95
Days of sales outstanding (DSO)	days	28.30	29.49	29.17	28.93	28.39	29.63	—	32.38	34.87	—	—	—	27.76	—	—	—	—	—	—	—
Number of days of payables	days	58.26	57.33	59.56	60.25	58.69	61.88	65.71	70.74	103.06	120.13	114.88	163.68	97.85	87.05	78.30	72.34	75.49	123.60	111.22	80.53
Cash conversion cycle	days	96.04	110.91	113.78	115.26	111.48	113.47	82.95	116.02	136.86	99.69	90.82	109.24	79.74	44.33	36.05	40.74	36.14	59.49	64.96	34.42

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 126.00 + 28.30 – 58.26
= 96.04

The cash conversion cycle for Plexus Corp has shown some fluctuation over the past few quarters. It indicates the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

Analyzing the trend, we see that the cash conversion cycle has generally ranged between 30 to 130 days, with some periods of shorter cycles in between. In the most recent quarter, the cycle stands at 96.04 days, which suggests that Plexus Corp takes approximately 3 months to complete a full cash cycle.

The longer the cash conversion cycle, the more resources are tied up in operations, potentially impacting liquidity and working capital management. Therefore, it may be beneficial for Plexus Corp to focus on streamlining its operations to reduce the cycle duration and improve cash flow efficiency.

Overall, monitoring and managing the cash conversion cycle is essential for Plexus Corp to optimize working capital, enhance financial performance, and maintain sustainable growth in the long term.