WD-40 Company (WDFC)
Cash conversion cycle
| Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.75 | 62.62 | 65.29 | 69.74 | 75.42 | 84.43 | 98.48 | 108.66 | 94.02 | 97.44 | 84.87 | 90.05 | 90.70 | 80.35 | 82.01 | 78.28 | 81.20 | 84.72 | 81.74 | 83.70 |
| Days of sales outstanding (DSO) | days | 73.05 | 74.55 | 68.90 | 63.61 | 67.29 | 69.91 | 72.18 | 62.65 | 63.49 | 67.45 | 73.47 | 70.15 | 66.97 | 79.03 | 76.52 | 76.50 | 72.08 | 69.08 | 66.00 | 60.79 |
| Number of days of payables | days | 28.53 | 26.48 | 27.11 | 24.30 | 26.87 | 23.72 | 25.88 | 29.04 | 29.67 | 41.30 | 44.55 | 46.84 | 54.50 | 52.66 | 51.06 | 46.38 | 42.66 | 34.28 | 46.89 | 35.35 |
| Cash conversion cycle | days | 107.27 | 110.69 | 107.07 | 109.06 | 115.84 | 130.62 | 144.78 | 142.26 | 127.83 | 123.60 | 113.79 | 113.36 | 103.17 | 106.72 | 107.47 | 108.39 | 110.63 | 119.53 | 100.85 | 109.15 |
August 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.75 + 73.05 – 28.53
= 107.27
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash inflows from sales. WD-40 Company's cash conversion cycle has fluctuated over the past few years, ranging from 100.85 days to 144.78 days. The company's cash conversion cycle was longest in Feb 2023 at 144.78 days, indicating a slower conversion of inventory into cash during that period.
Overall, WD-40 Company's cash conversion cycle appears to have improved in recent quarters, with the cycle decreasing from 130.62 days in May 2023 to 107.27 days in Aug 2024. This trend suggests that the company has been managing its inventory more efficiently and collecting cash from sales more promptly.
A lower cash conversion cycle indicates that the company is able to generate cash more quickly from its operating cycle, which can be a positive sign of operational efficiency and liquidity. Monitoring this metric over time can provide insights into the company's working capital management and overall financial health.
Peer comparison
Aug 31, 2024