Powell Industries Inc (POWL)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 38.03 | 36.97 | 35.50 | 23.52 | 21.44 |
| Days of sales outstanding (DSO) | days | 38.66 | 53.92 | 36.37 | 30.42 | 24.78 |
| Number of days of payables | days | 32.61 | 32.80 | 44.66 | 35.68 | 25.93 |
| Cash conversion cycle | days | 44.08 | 58.09 | 27.21 | 18.26 | 20.29 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.03 + 38.66 – 32.61
= 44.08
The cash conversion cycle of Powell Industries Inc has exhibited fluctuations over the past five years. In 2024, the company's cash conversion cycle was 44.08 days, representing an improvement from the previous year's cycle of 58.09 days. However, when compared to the cycle of 27.21 days in 2022, there seems to be a slight increase in the duration.
The trend over the five-year period indicates variability in how quickly Powell Industries Inc converts its investments in inventory and receivables into cash inflows from sales. The shorter cash conversion cycle in 2021 and 2020, at 18.26 days and 20.29 days respectively, indicates that the company was efficient in managing its working capital during those years.
Understanding and monitoring the cash conversion cycle is critical for assessing the effectiveness of a company's liquidity management and operational efficiency. The fluctuations in Powell Industries Inc's cash conversion cycle highlight the importance of closely monitoring working capital dynamics to ensure optimal cash flow management and sustainable business operations.
Peer comparison
Sep 30, 2024