Tetra Tech Inc (TTEK)

Cash conversion cycle

Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019
Days of inventory on hand (DOH) days
Days of sales outstanding (DSO) days 80.35 78.95 77.91 81.58 91.92
Number of days of payables days 733.76 1,364.91 1,359.68 871.53 27.94
Cash conversion cycle days -653.41 -1,285.95 -1,281.77 -789.95 63.98

September 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 80.35 – 733.76
= -653.41

The cash conversion cycle of Tetra Tech Inc has fluctuated significantly over the past five years. The company's cash conversion cycle shows a positive trend from negative 1,285.95 days in 2022 to negative 653.41 days in 2023. This improvement indicates that the company has been able to more efficiently manage its cash flow and working capital in the most recent year.

However, it is worth noting that the cash conversion cycle was positive in 2019, which implies that Tetra Tech Inc took longer to convert its investments in inventory to cash during that period. The sudden swing to a positive cash conversion cycle in 2019 from negative figures in the following years could indicate a change in the company's operational efficiency or financial management practices.

Overall, a negative cash conversion cycle suggests that Tetra Tech Inc is able to generate cash quickly from its operating activities, which can be a positive indicator of financial health and operational efficiency. Monitoring the trend of the cash conversion cycle over time can provide insights into the company's liquidity management and operational effectiveness.


Peer comparison

Sep 30, 2023

Company name
Symbol
Cash conversion cycle
Tetra Tech Inc
TTEK
-653.41
Aecom Technology Corporation
ACM
18.54