Pure Storage Inc (PSTG)
Cash conversion cycle
| Feb 4, 2024 | Nov 5, 2023 | Aug 6, 2023 | Feb 5, 2023 | Nov 6, 2022 | Aug 7, 2022 | May 8, 2022 | Feb 6, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 7.20 | 8.06 | 8.45 | 8.98 | 10.96 | 9.86 | 8.11 | 8.13 | 9.62 | 10.83 | 11.66 | 11.33 | 10.90 | 9.21 | 9.88 | 9.69 | 10.25 | 9.49 | 12.89 | 13.41 |
| Days of sales outstanding (DSO) | days | 79.35 | 79.38 | 68.16 | 81.58 | — | — | — | 92.51 | 66.66 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 13.97 | 17.63 | 17.43 | 12.02 | 18.88 | 12.08 | 11.53 | 14.77 | 10.64 | 12.56 | 9.60 | 16.37 | 22.58 | 14.28 | 16.31 | 19.54 | 15.34 | 17.12 | 21.18 | 31.05 |
| Cash conversion cycle | days | 72.58 | 69.81 | 59.18 | 78.54 | -7.92 | -2.22 | -3.41 | 85.88 | 65.64 | -1.73 | 2.06 | -5.04 | -11.68 | -5.07 | -6.43 | -9.85 | -5.09 | -7.62 | -8.29 | -17.64 |
February 4, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.20 + 79.35 – 13.97
= 72.58
The cash conversion cycle of Pure Storage Inc has shown volatility over the past several periods. A positive cash conversion cycle indicates the time it takes for the company to convert its investments in inventory back into cash. A higher number suggests inefficiency in managing working capital.
From February 2023 to February 2024, Pure Storage Inc had consistently positive cash conversion cycles, ranging from 59.18 days to 85.88 days. This suggests that the company took an average of 59 to 86 days to convert its investments in inventory back into cash during this period.
However, in the period from August 2022 to November 2022, the company's cash conversion cycle turned negative, indicating an efficient management of working capital. In particular, in November 2022 and August 2022, the negative cash conversion cycles were notable at -7.92 days and -2.22 days, respectively. This means that the company was able to convert its investments in inventory back into cash in less than a month.
Overall, Pure Storage Inc experienced significant fluctuations in its cash conversion cycle over the analyzed periods, with both positive and negative cycles observed. This variability may reflect changes in the company's inventory management practices, payment terms with customers, and efficiency in converting sales into cash.
Peer comparison
Feb 4, 2024