Seagate Technology PLC (STX)
Cash conversion cycle
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 89.13 | 90.18 | 68.97 | 69.73 | 56.60 |
| Days of sales outstanding (DSO) | days | 38.48 | 30.03 | 30.70 | 47.95 | 39.57 |
| Number of days of payables | days | 99.28 | 129.99 | 96.98 | 91.70 | 81.10 |
| Cash conversion cycle | days | 28.33 | -9.78 | 2.69 | 25.99 | 15.08 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.13 + 38.48 – 99.28
= 28.33
The cash conversion cycle (CCC) of Seagate Technology PLC has exhibited notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. Initially, as of June 30, 2021, the CCC stood at 15.08 days, indicating that the company took approximately that duration to convert its investments in inventory and receivables into cash, after accounting for its payables.
By June 30, 2022, the CCC increased markedly to 25.99 days. This escalation suggests a period during which Seagate experienced extended liquidity cycles, possibly due to longer inventory turnover, delayed receivables collection, or changes in payment terms with suppliers.
A significant improvement is observed as of June 30, 2023, when the CCC sharply decreased to 2.69 days. This reduction implies greater efficiency in managing cash flow cycles, with the company rapidly converting its inventory and receivables into cash and/or extending its payables period. This trend indicates enhanced operational efficiency or favorable changes in the company's working capital management.
The further shift occurred by June 30, 2024, when the CCC turned negative at -9.78 days. A negative CCC signifies that Seagate's payables are being settled after the company has collected cash from receivables and converted inventory, effectively allowing the firm to finance its operations through credit extended by suppliers. This scenario reflects a substantial improvement in working capital management, positioning Seagate as one that benefits from supplier credit terms.
Finally, by June 30, 2025, the CCC returned to zero days. A zero CCC indicates a neutral cycle where the company’s receivables, inventory, and payables are aligned in timing, with no net accumulation or release of working capital in the cycle. This equilibrium point suggests a highly balanced and possibly optimized management of the company's cash conversion processes.
Overall, the trend demonstrates a progression from a positive CCC, indicating reliance on cash conversion within typical operational cycles, toward a negative and then neutral cycle, reflecting increased efficiency and improved working capital management. These shifts may be indicative of strategic operational adjustments, supplier negotiations, or improvements in receivables and inventory management practices over the analyzed period.
Peer comparison
Jun 30, 2025