ScanSource Inc (SCSC)
Cash conversion cycle
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.02 | 75.70 | 65.83 | 55.52 | 53.42 |
| Days of sales outstanding (DSO) | days | 74.96 | 80.04 | 82.88 | 74.57 | 60.07 |
| Number of days of payables | days | 67.69 | 69.06 | 76.47 | 74.98 | 53.34 |
| Cash conversion cycle | days | 66.29 | 86.68 | 72.24 | 55.11 | 60.14 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.02 + 74.96 – 67.69
= 66.29
ScanSource Inc's cash conversion cycle has fluctuated over the past five years. In the most recent year, ending June 30, 2024, the cash conversion cycle decreased to 66.29 days from 86.68 days in the previous year. This indicates that the company was able to manage its operating cycle more efficiently, resulting in a shorter period required to convert its investments in inventory and receivables into cash.
Comparing the latest results to five years ago, the cash conversion cycle has shown improvement as it decreased from 60.14 days in 2020 to 66.29 days in 2024. Despite the recent improvement, the company experienced a peak in its cash conversion cycle in 2023 at 86.68 days, suggesting potential inefficiencies in managing inventory, receivables, and payables during that period.
Overall, a lower cash conversion cycle indicates better management of working capital and liquidity. ScanSource Inc should continue monitoring and optimizing its cash conversion cycle to ensure efficient operations and maximize cash flow within the business.
Peer comparison
Jun 30, 2024