Powell Industries Inc (POWL)
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 | 38.03 | 39.58 | 41.26 | 37.82 | 36.97 | 39.94 | 37.74 | 37.62 | 35.50 | 36.18 | 33.62 | 28.28 | 23.52 | 23.12 | 24.55 | 22.60 | 21.44 | 22.10 | 21.11 | 22.84 |
| Days of sales outstanding (DSO) | days | 77.32 | 66.90 | 79.02 | 80.70 | 107.81 | 114.26 | 103.78 | 99.54 | 72.46 | 75.14 | 69.10 | 61.77 | 60.81 | 58.04 | 57.50 | 57.54 | 49.55 | 64.42 | 58.03 | 68.06 |
| Number of days of payables | days | 32.61 | 37.05 | 40.10 | 27.23 | 32.80 | 37.97 | 32.93 | 26.42 | 44.66 | 34.32 | 37.48 | 33.12 | 35.68 | 27.21 | 32.37 | 21.81 | 25.93 | 26.88 | 29.91 | 31.79 |
| Cash conversion cycle | days | 82.75 | 69.43 | 80.18 | 91.29 | 111.97 | 116.23 | 108.59 | 110.74 | 63.30 | 77.00 | 65.24 | 56.93 | 48.66 | 53.95 | 49.68 | 58.32 | 45.07 | 59.64 | 49.23 | 59.11 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.03 + 77.32 – 32.61
= 82.75
The cash conversion cycle of Powell Industries Inc has fluctuated over the past few quarters, indicating varying efficiency levels in managing its working capital. The company's cash conversion cycle measures the time it takes to convert its investments in inventory into cash receipts from sales.
In the most recent quarter, the cash conversion cycle was 82.75 days, showing an increase from the previous quarter where it was 69.43 days. This suggests that Powell Industries took longer to convert its resource investments into cash during this period.
Looking at historical data, there seems to be a pattern of seasonality in the cash conversion cycle, with peaks and troughs occurring at different points in the year. For example, there was a significant increase in the cycle in the December quarter of 2023, where it reached 91.29 days, possibly due to higher inventory levels or slower collection of receivables during the holiday season.
On the other hand, the company has also shown periods of improved efficiency in managing its working capital, such as in the March quarter of 2022, where the cash conversion cycle was relatively low at 56.93 days. This indicates that Powell Industries was able to streamline its operations and convert its investments into cash more rapidly during that period.
Overall, monitoring the cash conversion cycle can provide insights into the company's operational efficiency and working capital management practices. Powell Industries should focus on optimizing its inventory levels, accelerating its collection of receivables, and efficiently managing its payables to reduce the cycle duration and improve its overall cash flow management.
Peer comparison
Sep 30, 2024