Advanced Drainage Systems Inc (WMS)
Cash conversion cycle
| Mar 31, 2025 | Dec 31, 2024 | 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 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 98.46 | 94.79 | 99.47 | 100.22 | 98.02 | 85.94 | 80.30 | 86.35 | 86.73 | 81.91 | 82.47 | 86.61 | 91.64 | 94.52 | 96.48 | 83.78 | 84.98 | 70.42 | 68.45 | 72.67 |
| Days of sales outstanding (DSO) | days | 39.46 | 30.76 | 44.79 | 46.29 | 41.09 | 30.97 | 45.46 | 42.57 | 36.48 | 28.26 | 44.36 | 51.78 | 45.04 | 43.65 | 57.22 | 51.72 | 43.48 | 36.07 | 52.26 | 49.90 |
| Number of days of payables | days | 43.97 | 36.60 | 55.79 | 54.41 | 53.72 | 44.07 | 46.61 | 40.84 | 39.27 | 31.07 | 40.72 | 48.59 | 41.71 | 39.69 | 58.44 | 58.09 | 48.31 | 31.95 | 34.96 | 29.36 |
| Cash conversion cycle | days | 93.96 | 88.95 | 88.47 | 92.10 | 85.39 | 72.84 | 79.14 | 88.08 | 83.94 | 79.10 | 86.11 | 89.80 | 94.97 | 98.48 | 95.26 | 77.41 | 80.15 | 74.54 | 85.76 | 93.22 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.46 + 39.46 – 43.97
= 93.96
The cash conversion cycle (CCC) of Advanced Drainage Systems Inc has fluctuated over the past few years. The CCC is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In the most recent period as of March 31, 2025, the CCC stood at 93.96 days. This means that on average, it takes the company nearly 94 days to convert its investments in inventory and other resources into cash flows from sales.
Looking at the trend over the provided periods, the company's CCC has shown some variation, reaching a peak of 98.48 days on December 31, 2021, and a low of 72.84 days on December 31, 2023. Generally, a lower CCC is preferable as it indicates that the company is able to more quickly convert its investments into cash, showing efficiency in its operations.
It is important for Advanced Drainage Systems Inc to monitor and manage its CCC effectively. A shorter CCC can lead to improved liquidity and working capital management, while a longer CCC can tie up cash and resources, potentially indicating inefficiencies in the company's operations or supply chain management.
Overall, through monitoring and potentially improving its CCC, Advanced Drainage Systems Inc can enhance its financial performance and efficiency in managing its working capital.