Vestis Corporation (VSTS)
Cash conversion cycle
| 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 | 99.79 | 106.29 | 110.86 | 111.68 | |||
| Days of sales outstanding (DSO) | days | — | — | — | — | |||
| Number of days of payables | days | — | — | — | — | |||
| Cash conversion cycle | days | 99.79 | 106.29 | 110.86 | 111.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.79 + — – —
= 99.79
The cash conversion cycle for Vestis Corporation has shown a mixed trend over the past seven quarters. In the most recent quarter ending on December 31, 2023, the company's cash conversion cycle stood at 99.79 days, indicating an improvement compared to the previous quarter. However, the cycle had increased in the two preceding quarters, reaching its peak at 111.68 days on March 31, 2023.
A lower cash conversion cycle suggests that Vestis Corporation is managing its cash flow more efficiently, as it takes fewer days to convert its investments in inventory back into cash. On the other hand, a higher cycle indicates inefficiencies in managing accounts receivable, inventory, and accounts payable.
Overall, Vestis Corporation should closely monitor its cash conversion cycle to ensure that it remains at an optimal level, balancing the need to maintain adequate inventory levels with the goal of minimizing the time it takes to collect cash from customers and pay suppliers.
Peer comparison
Dec 31, 2023