RPM International Inc (RPM)
Cash conversion cycle
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 87.53 | 80.80 | 91.93 | 103.54 | 92.51 |
| Days of sales outstanding (DSO) | days | 74.71 | 73.51 | 75.60 | 77.96 | 76.56 |
| Number of days of payables | days | 63.83 | 54.88 | 55.13 | 68.34 | 70.73 |
| Cash conversion cycle | days | 98.41 | 99.43 | 112.41 | 113.16 | 98.35 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.53 + 74.71 – 63.83
= 98.41
The cash conversion cycle (CCC) for RPM International Inc. from May 31, 2021, through May 31, 2025, exhibits notable fluctuations over the analyzed period. In 2021, the CCC was 98.35 days, reflecting a period when the company had a relatively efficient management of its working capital and inventory conversion processes. Moving into 2022, there was an increase to 113.16 days, indicating a lengthening in the cycle, which could suggest delays in receivables collection, extended inventory holding periods, or a combination thereof.
In 2023, the CCC remained relatively stable at 112.41 days, continuing to reflect the extended cycle observed in 2022. However, a significant reduction occurred in 2024, where the cycle decreased to 99.43 days, signaling improved efficiency in managing receivables, inventory, or payables, thereby shortening the period during which capital is tied up in working capital.
The subsequent year, 2025, experienced a slight further decrease to 98.41 days, bringing the CCC close to the 2021 levels. This suggests a return to more optimal cash management, potentially driven by operational adjustments, improved collection practices, or supply chain efficiencies.
Overall, the period demonstrates a pattern of initial stability, a peak in the cycle duration during 2022 and 2023, followed by a notable improvement in 2024 and 2025. These shifts in the cash conversion cycle may reflect strategic operational changes, variations in credit policies, or external market factors impacting inventory and receivables management. The relative stabilization near the 2021 levels towards the end of the forecasted period indicates a trend towards more efficient working capital management, aligning with best practices for maintaining liquidity and operational flexibility.
Peer comparison
May 31, 2025