Synnex Corporation (SNX)

Cash conversion cycle

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019	Feb 28, 2019
Days of inventory on hand (DOH)	days	48.41	46.84	48.00	52.63	56.62	61.47	63.63	72.68	81.57	50.28	46.83	47.63	52.16	35.37	44.66	46.73	51.90	152.20	89.89	59.58
Days of sales outstanding (DSO)	days	56.54	62.92	53.48	55.09	55.16	47.99	55.58	75.62	95.94	36.79	40.27	41.71	70.72	64.10	55.24	53.55	60.79	55.61	58.93	55.89
Number of days of payables	days	84.46	87.48	80.32	81.71	87.37	86.45	94.47	112.41	147.78	56.52	61.11	58.05	72.89	45.65	50.14	44.66	64.17	160.11	95.29	53.63
Cash conversion cycle	days	20.49	22.27	21.17	26.01	24.41	23.02	24.75	35.89	29.73	30.54	26.00	31.29	49.99	53.82	49.77	55.63	48.52	47.70	53.54	61.84

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.41 + 56.54 – 84.46
= 20.49

The cash conversion cycle of Synnex Corporation has exhibited fluctuations over the analyzed periods. The cycle represents the time it takes for the company to convert its investments in inventory into cash from sales. A shorter cash conversion cycle indicates more efficient management of working capital.

From Feb 29, 2024, to May 31, 2020, the company's cash conversion cycle fluctuated, with some periods showing improvements and others showing increases. Notably, there was a decreasing trend from May 31, 2020, to Nov 30, 2021, suggesting an improvement in managing inventory, accounts receivable, and accounts payable.

However, the cycle increased significantly from Nov 30, 2021, to Feb 29, 2022, indicating potential challenges in managing working capital efficiently during that period. It's essential for the company to analyze the factors contributing to this rise and take corrective actions to optimize its cash conversion cycle.

Overall, analyzing the cash conversion cycle over the periods provides insights into Synnex Corporation's working capital management and operational efficiency. The company should strive for a balanced approach to managing inventory levels, collecting receivables promptly, and optimizing payment terms with suppliers to enhance its cash flow and overall financial performance.