Advanced Drainage Systems Inc (WMS)
Cash conversion cycle
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 859.68 | 989.19 | 1,049.21 | 264.68 | 260.11 |
| Days of sales outstanding (DSO) | days | 40.99 | 36.48 | 45.06 | 43.61 | 44.71 |
| Number of days of payables | days | 471.14 | 447.94 | 477.54 | 150.47 | 98.29 |
| Cash conversion cycle | days | 429.53 | 577.73 | 616.73 | 157.82 | 206.53 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 859.68 + 40.99 – 471.14
= 429.53
Advanced Drainage Systems Inc's cash conversion cycle has been fluctuating over the past five years. In 2024, the company's cash conversion cycle improved significantly to 429.53 days compared to the previous year's 577.73 days. This indicates that the company took less time to convert its investments in inventory and accounts receivable into cash during the recent period.
However, the cash conversion cycle in 2024 is still higher than in 2021, where it was 157.82 days, which was the lowest in the past five years. The longer cash conversion cycle in 2022 and 2023 suggests that the company took more time to convert its assets into cash during those years.
Overall, Advanced Drainage Systems Inc needs to continue monitoring and managing its cash conversion cycle efficiently to ensure optimal cash flow management and liquidity.