Post Holdings Inc (POST)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 56.43 | 45.72 | 48.97 | 67.08 | 54.42 |
| Days of sales outstanding (DSO) | days | 26.75 | 33.95 | 33.15 | 34.21 | 28.60 |
| Number of days of payables | days | 26.35 | 37.69 | 39.47 | 41.17 | 37.13 |
| Cash conversion cycle | days | 56.84 | 41.97 | 42.65 | 60.12 | 45.88 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.43 + 26.75 – 26.35
= 56.84
The cash conversion cycle (CCC) of Post Holdings Inc has exhibited some fluctuation over the past five years. The CCC increased from 42.59 days in 2021 to 49.95 days in 2020, before slightly declining to 49.18 days in 2019. However, there was a significant improvement in 2022 with the CCC decreasing to 46.41 days, followed by a further increase to 56.93 days in 2023.
The increase in the CCC indicates that the company took longer to convert its resources into cash in 2023 compared to the previous year. This could be due to factors such as longer inventory holding periods, extended accounts receivable collection times, or delayed payment to suppliers. Conversely, the decline in the CCC in 2022 suggests an improvement in the efficiency of the company's working capital management. Overall, the trend in the CCC warrants further investigation into the company's inventory turnover, accounts receivable collection, and accounts payable management to assess the underlying reasons for the observed changes.
Peer comparison
Sep 30, 2023