Vestis Corporation (VSTS)
Cash conversion cycle
| Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 23.50 | 23.18 | 22.76 | 25.86 | 106.29 | 110.86 | 111.68 | |||
| Days of sales outstanding (DSO) | days | 23.06 | 52.73 | 52.02 | 51.78 | — | — | — | |||
| Number of days of payables | days | 23.23 | 22.72 | 23.67 | 22.42 | — | — | — | |||
| Cash conversion cycle | days | 23.33 | 53.18 | 51.11 | 55.22 | 106.29 | 110.86 | 111.68 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 23.50 + 23.06 – 23.23
= 23.33
The cash conversion cycle is a key metric that measures how long it takes for a company to convert its investments in inventory and other resources back into cash. For Vestis Corporation, the cash conversion cycle has shown fluctuations over the periods analyzed.
From the data provided, we can see that Vestis Corporation's cash conversion cycle has varied significantly over the past nine quarters. In the most recent period, ending on September 30, 2024, the company's cash conversion cycle was 23.33 days, indicating an improvement in efficiency compared to the previous quarter.
Looking back further, we observe that Vestis Corporation experienced an increase in its cash conversion cycle during the March 31, 2023 quarter when it reached 111.68 days. This longer cycle suggests that the company may have faced challenges in managing its inventory, accounts receivable, and accounts payable effectively during that period.
Overall, Vestis Corporation's cash conversion cycle has shown both positive and negative trends over the analyzed periods. It is crucial for the company to strive for a shorter cash conversion cycle to optimize its working capital management and improve overall financial performance.
Peer comparison
Sep 30, 2024