Varex Imaging Corp (VREX)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 174.43 | 167.94 | 192.17 | 150.11 | 181.07 |
| Days of sales outstanding (DSO) | days | 70.97 | 66.84 | 73.60 | 69.29 | 61.20 |
| Number of days of payables | days | 38.93 | 39.16 | 49.56 | 39.26 | 48.55 |
| Cash conversion cycle | days | 206.47 | 195.63 | 216.21 | 180.14 | 193.73 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 174.43 + 70.97 – 38.93
= 206.47
The cash conversion cycle of Varex Imaging Corp has varied over the past five years. In 2024, the cycle lengthened to 206.47 days compared to 195.63 days in 2023. This increase indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during that period.
In 2022, the cash conversion cycle increased significantly to 216.21 days, indicating a slowdown in the company's ability to efficiently manage its working capital. However, in 2021, the cycle decreased to 180.14 days, suggesting that Varex Imaging Corp improved its working capital management and converted its assets into cash more effectively.
The cash conversion cycle then increased again in 2020 to 193.73 days, indicating a slight weakness in the company's working capital management compared to the previous year. Overall, fluctuations in the cash conversion cycle suggest varying efficiencies in managing cash flow, inventory, and receivables over the years.
Peer comparison
Sep 30, 2024