Universal Corporation (UVV)
Cash conversion cycle
| 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 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 27.79 | 28.87 | 31.43 | 29.05 | 30.79 | 32.79 | 38.45 | 35.60 | 36.12 | 30.41 | 29.93 | 27.01 | 28.55 | 27.86 | 24.44 | 21.07 | 20.30 | 17.36 | 18.43 | 14.28 |
| Days of sales outstanding (DSO) | days | 35.56 | 30.29 | 25.93 | 26.24 | 29.00 | 39.63 | 40.27 | 30.99 | 34.14 | 35.77 | 31.76 | 30.36 | 34.21 | 39.33 | 45.66 | 28.97 | 40.49 | 33.69 | 44.15 | 28.48 |
| Number of days of payables | days | 0.23 | 0.02 | 0.02 | 0.22 | 0.88 | 0.01 | — | 0.02 | 0.99 | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 63.12 | 59.14 | 57.34 | 55.07 | 58.90 | 72.41 | 78.72 | 66.57 | 69.28 | 66.18 | 61.69 | 57.37 | 62.76 | 67.19 | 70.10 | 50.04 | 60.79 | 51.05 | 62.58 | 42.76 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.79 + 35.56 – 0.23
= 63.12
The cash conversion cycle for Universal Corporation has varied over the past multiple quarters, indicating fluctuations in the company's efficiency in managing its working capital. In March 2024, the cash conversion cycle was 63.12 days, showing a slight increase compared to the previous quarter. This may be attributed to changes in the company's inventory management, accounts receivable collection, and accounts payable payment processes.
Looking at historical trends, the cash conversion cycle has shown some volatility, with peaks observed in December 2022 and September 2022 at 72.41 days and 78.72 days, respectively. These longer cycles suggest that Universal Corporation took more time to convert its investments in inventory into cash and then collect receivables, potentially indicating inefficiencies in the working capital management during those periods.
On the other hand, the company experienced relatively shorter cash conversion cycles in June 2020 and June 2019, at 50.04 days and 42.76 days, respectively. These lower figures signal that Universal Corporation was more effective in generating cash from its operations during those quarters, likely due to streamlined inventory turnover and quicker collection of receivables.
Overall, fluctuations in the cash conversion cycle reflect changes in Universal Corporation's operational efficiency and working capital management practices. Monitoring this metric over time can provide insights into the company's ability to efficiently utilize its resources and convert them into cash.
Peer comparison
Mar 31, 2024