Woodward Inc (WWD)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 73.90 | 89.52 | 79.37 | 73.56 | 76.69 |
| Days of sales outstanding (DSO) | days | 63.61 | 57.99 | 55.09 | 57.18 | 54.20 |
| Number of days of payables | days | 33.44 | 40.12 | 32.30 | 22.55 | 35.68 |
| Cash conversion cycle | days | 104.07 | 107.39 | 102.16 | 108.19 | 95.21 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.90 + 63.61 – 33.44
= 104.07
The cash conversion cycle of Woodward Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 141.94 days from 149.99 days in 2022, indicating an improvement in the efficiency of its working capital management. However, compared to 2021, the cash conversion cycle increased slightly, suggesting potential challenges in converting inventory and receivables into cash. In 2019, the company recorded the lowest cash conversion cycle at 121.47 days, signifying strong working capital management efficiency. Overall, fluctuations in the cash conversion cycle highlight the need for Woodward Inc to focus on optimizing its inventory and receivables turnover to enhance its cash flow management.