Pure Storage Inc (PSTG)
Cash conversion cycle
| Feb 4, 2024 | Feb 5, 2023 | Feb 6, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 7.25 | 8.81 | 7.98 | 11.06 | 9.43 |
| Days of sales outstanding (DSO) | days | 85.79 | 81.58 | 92.51 | 101.63 | 103.84 |
| Number of days of payables | days | 14.06 | 11.79 | 14.49 | 15.98 | 19.01 |
| Cash conversion cycle | days | 78.97 | 78.60 | 86.00 | 96.70 | 94.26 |
February 4, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.25 + 85.79 – 14.06
= 78.97
The cash conversion cycle of Pure Storage Inc has shown a relatively stable trend over the past five years. The company's cash conversion cycle gradually decreased from 94.26 days in 2020 to 78.97 days in 2024, indicating an improvement in the efficiency of converting investments in inventory and other resources into cash inflows.
A lower cash conversion cycle signifies that Pure Storage Inc is managing its working capital more effectively, which may result in better liquidity and cash flow management. This trend suggests that the company is becoming more efficient in managing its inventory, accounts receivable, and accounts payable.
Overall, the decreasing trend in Pure Storage Inc's cash conversion cycle over the years indicates an improvement in operational efficiency and working capital management, which can positively impact the company's financial health and sustainability.
Peer comparison
Feb 4, 2024