Vista Outdoor Inc (VSTO)
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 | 82.53 | 87.70 | 99.90 | 100.85 | 99.72 | 109.76 | 110.43 | 96.40 | 97.93 | 97.04 | 96.53 | 90.55 | 85.13 | 63.96 | 64.34 | 65.10 | 63.85 | 68.63 | 56.27 | 56.94 |
| Days of sales outstanding (DSO) | days | 47.24 | 51.90 | 53.55 | 49.22 | 41.01 | 49.04 | 55.64 | 50.43 | 43.14 | 54.07 | 58.78 | 53.97 | 49.86 | 62.51 | 69.53 | 68.74 | 66.61 | 63.92 | 71.81 | 68.17 |
| Number of days of payables | days | 22.11 | 16.94 | 18.67 | 22.21 | 19.18 | 22.32 | 25.37 | 26.22 | 22.34 | 28.26 | 31.09 | 30.38 | 30.69 | 21.19 | 23.83 | 22.55 | 17.34 | 19.80 | 17.09 | 18.90 |
| Cash conversion cycle | days | 107.66 | 122.66 | 134.78 | 127.86 | 121.55 | 136.48 | 140.70 | 120.61 | 118.73 | 122.86 | 124.22 | 114.14 | 104.30 | 105.28 | 110.04 | 111.30 | 113.12 | 112.75 | 110.99 | 106.22 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.53 + 47.24 – 22.11
= 107.66
The cash conversion cycle of Vista Outdoor Inc has shown fluctuations over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory into cash inflows from the sale of products or services.
From the data provided, we can observe that the cash conversion cycle ranged from a low of 104.30 days in March 2021 to a high of 140.70 days in September 2022. Generally, a shorter cash conversion cycle indicates more efficient operations and better management of working capital.
Vista Outdoor Inc experienced an increase in the cash conversion cycle in the most recent quarter, reaching 107.66 days in March 2024. This increase may suggest a slowdown in the collection of accounts receivable or a lengthening of the time it takes to sell inventory.
It is important for the company to closely monitor its cash conversion cycle and work towards optimizing it to improve liquidity and operational efficiency. Strategies to reduce the cash conversion cycle may include streamlining inventory management, speeding up accounts receivable collection, and negotiating favorable payment terms with suppliers.
Overall, a lower cash conversion cycle indicates that Vista Outdoor Inc is efficiently managing its working capital and generating cash flows from its operational activities. Continual monitoring and improvement in this area can contribute to the company's financial health and stability.
Peer comparison
Mar 31, 2024