Bio-Techne Corp (TECH)

Cash conversion cycle

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Days of inventory on hand (DOH)	days	97.42	77.20	79.72	86.40	80.55	75.19	66.93	58.55	56.02	54.03	56.88	61.55	64.82	75.53	77.11	80.66	79.46	76.64	74.21	71.70
Days of sales outstanding (DSO)	days	76.00	73.13	66.97	65.98	70.12	70.20	60.19	56.89	64.89	69.31	54.86	55.43	57.86	68.79	59.52	60.01	61.77	57.94	55.92	62.37
Number of days of payables	days	20.58	12.43	13.89	13.04	12.05	12.03	10.07	11.89	13.44	13.00	12.49	13.44	16.31	17.75	17.54	20.69	17.79	15.17	14.86	11.13
Cash conversion cycle	days	152.83	137.90	132.80	139.34	138.62	133.36	117.05	103.54	107.47	110.34	99.24	103.54	106.37	126.58	119.08	119.99	123.44	119.40	115.27	122.94

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 97.42 + 76.00 – 20.58
= 152.83

The cash conversion cycle of Bio-Techne Corp has fluctuated over the past few quarters, indicating varying efficiency in managing its working capital. A longer cash conversion cycle suggests that the company takes more time to convert its investments in raw materials and production into cash receipts from sales.

In the most recent quarter, the cash conversion cycle was 152.83 days, indicating a relatively extended period for the company to realize cash from its operations. This could be a potential concern as it may tie up a significant amount of capital in the operating cycle, affecting liquidity and overall financial flexibility.

It is worth noting that there was a notable increase in the cash conversion cycle from the previous quarter (137.90 days), indicating potential challenges in managing inventories, receivables, and payables efficiently.

Overall, Bio-Techne Corp should focus on optimizing its inventory management, improving accounts receivable collection, and negotiating favorable payment terms with suppliers to shorten the cash conversion cycle. By doing so, the company can enhance its cash flow generation and overall financial performance.