REX American Resources Corporation (REX)

Cash conversion cycle

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Days of inventory on hand (DOH)	days	13.40	17.94	21.17	18.27	22.11	19.36	23.99	28.79	22.76	17.43	27.69	23.78	38.19	22.36	33.01	25.06	32.07	28.16	18.74	16.44
Days of sales outstanding (DSO)	days	12.66	14.92	16.26	14.29	12.01	12.33	19.10	14.30	15.31	24.35	21.79	27.02	25.19	18.31	22.51	11.46	16.59	21.00	12.53	15.02
Number of days of payables	days	20.89	13.76	10.18	7.91	15.46	18.54	10.18	9.78	17.39	15.89	14.61	14.08	17.25	16.12	9.33	6.79	17.01	11.90	7.54	5.57
Cash conversion cycle	days	5.17	19.11	27.25	24.65	18.65	13.15	32.90	33.30	20.68	25.89	34.86	36.71	46.13	24.54	46.19	29.74	31.65	37.25	23.73	25.89

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 13.40 + 12.66 – 20.89
= 5.17

The cash conversion cycle of REX American Resources Corporation has shown fluctuations over the past few quarters. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Looking at the trend, the company's cash conversion cycle has ranged from a low of 5.17 days to a high of 46.19 days over the past two years. A shorter cash conversion cycle indicates that the company is able to quickly convert its investments into cash, which is generally favorable as it reflects efficient operations.

In analyzing the data, it is important to note that a longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying off liabilities. For example, during the quarter in which the cash conversion cycle was at its peak of 46.19 days, the company may have faced challenges in converting its investments into cash and managing its working capital effectively.

Overall, closely monitoring the cash conversion cycle can provide insights into the company's operational efficiency and effectiveness in managing its working capital. Additionally, identifying the factors driving fluctuations in the cash conversion cycle can help management implement strategies to improve cash flow and optimize the company's financial performance.