Outstanding Performance Unveiled as Key Factor in Mobile Mini's Impressive Earnings
In an analysis published on Fool.com, the focus is on Mobile Mini (NAS: MINI), a company that has shown impressive performance in cash flow management over the past year. The author, Seth Jayson, delves into the Cash Conversion Cycle (CCC) of Mobile Mini to shed light on the factors contributing to its strong earnings.
The Cash Conversion Cycle (CCC) is a valuable tool used to measure how quickly a company turns cash into goods or services and back into cash. A lower score on the CCC indicates a more powerful and flexible profit engine. In the case of Mobile Mini, the company's CCC has been running better than average, both over 12-month and quarterly periods.
Over the last 12 months, Mobile Mini's CCC stands at 46.7 days, a significant improvement compared to the five-year average of 97.8 days. This improvement is primarily due to a 162.5-day improvement in Days Inventory Outstanding (DIO). On a quarterly basis, Mobile Mini's CCC is also better than the eight-quarter average, with a CCC of 46.4 days compared to the average of 69.5 days.
The trend of Mobile Mini's cash conversion cycle (CCC) over the last 12 months is a positive sign, indicating improved cash flow management. However, it's important to note that the CCC may not be strictly comparable due to seasonality in some businesses.
The author's interest lies in comparing a company's CCC to its prior performance to identify trends. By doing so, one can gain insights into the sustainability of growth for younger, fast-growth companies, as well as how well older, mature companies are managed.
The CCC is worth watching every quarter to be better informed about potential problems and to find underappreciated stocks. For Mobile Mini, the CCC trend looks good on both a 12-month and quarterly basis, making it a company worth keeping an eye on.
It's essential to remember that while the CCC offers valuable insights, it should not be the only factor considered when evaluating a company's prospects. Nonetheless, in the case of Mobile Mini, the improved CCC over the last 12 months is a significant factor contributing to its impressive earnings.
Seth Jayson had no position in any company mentioned in the article at the time of publication. The article originally appeared on Fool.com.
Read also:
- Federal petition from CEI seeking federal intervention against state climate disclosure laws, alleging these laws negatively impact interstate commerce and surpass constitutional boundaries.
- Duty on cotton imported into India remains unchanged, as U.S. tariffs escalate to their most severe levels yet
- Steak 'n Shake CEO's supposed poor leadership criticism sparks retaliation from Cracker Barrel, accusing him of self-interest
- President von der Leyen's address at the Fourth Renewable Hydrogen Summit, delivered remotely
