Pure Storage Inc (PSTG)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 4, 2024 | Jan 31, 2024 | Nov 5, 2023 | Oct 31, 2023 | Aug 6, 2023 | Jul 31, 2023 | Apr 30, 2023 | Feb 5, 2023 | Jan 31, 2023 | Nov 6, 2022 | Oct 31, 2022 | Aug 7, 2022 | Jul 31, 2022 | May 8, 2022 | Apr 30, 2022 | Feb 6, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 16.35 | 12.32 | 13.20 | 9.95 | 10.35 | 10.78 | 11.84 | 15.49 | 11.82 | 14.27 | 12.57 | 11.90 | 13.37 | 15.84 | 16.34 | 14.08 | 13.40 | 10.38 | 13.06 | 10.49 |
| Days of sales outstanding (DSO) | days | — | — | — | — | 78.04 | — | 80.29 | — | 68.98 | — | — | 75.25 | — | — | — | — | — | — | — | 80.63 |
| Number of days of payables | days | — | — | — | — | 20.08 | — | 25.90 | — | 24.38 | — | — | 15.92 | — | 27.29 | — | 17.24 | — | 14.74 | — | 19.04 |
| Cash conversion cycle | days | 16.35 | 12.32 | 13.20 | 9.95 | 68.31 | 10.78 | 66.23 | 15.49 | 56.41 | 14.27 | 12.57 | 71.22 | 13.37 | -11.45 | 16.34 | -3.16 | 13.40 | -4.36 | 13.06 | 72.07 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 16.35 + — – —
= 16.35
The cash conversion cycle of Pure Storage Inc has shown varying trends over the given time periods. It is calculated by adding the Days Sales Outstanding (DSO) to the Days Inventory Outstanding (DIO) and then subtracting the Days Payable Outstanding (DPO) from the sum.
From February 6, 2022, to February 5, 2023, the cash conversion cycle ranged from 72.07 days to 71.22 days, indicating that the company took around 71-72 days on average to convert its investments in inventory and other resources into cash.
There was a significant improvement in the cash conversion cycle from February 2023 to April 2024, with days ranging from -11.45 days to 13.20 days. Negative values in the cycle indicate that the company was able to convert its investments into cash at a faster rate than paying off its liabilities during those periods.
Towards January 31, 2025, the cash conversion cycle increased slightly to 16.35 days, still showing efficient management of working capital. A lower cash conversion cycle is generally favorable as it signifies that the company is efficiently managing its inventory, collecting receivables quickly, and delaying payments to suppliers.
Overall, fluctuations in the cash conversion cycle can indicate changes in the company's operational efficiency and effectiveness in managing its working capital. The company should aim to maintain a low and stable cash conversion cycle to optimize its cash flow and liquidity position.
Peer comparison
Jan 31, 2025