AAON Inc (AAON)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.24 | 93.10 | 100.29 | 69.63 | 65.58 |
| Days of sales outstanding (DSO) | days | 43.32 | 52.04 | 51.89 | 36.18 | 53.07 |
| Number of days of payables | days | 10.33 | 21.30 | 22.34 | 10.54 | 10.48 |
| Cash conversion cycle | days | 113.23 | 123.83 | 129.83 | 95.27 | 108.17 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.24 + 43.32 – 10.33
= 113.23
The cash conversion cycle of AAON Inc. has been fluctuating over the past five years. In 2023, the company's cash conversion cycle was 131.39 days, showing an improvement from the previous year. The shorter cash conversion cycle indicates that the company is able to convert its inventory into cash more efficiently.
Comparing to 2021 and 2020, where the cash conversion cycle was 145.40 days and 107.89 days respectively, it can be observed that there has been volatility in the efficiency of the company's cash conversion cycle. The longer cycle in 2021 may indicate potential issues with inventory management or delays in collecting receivables.
Overall, while AAON Inc. has shown improvement in its cash conversion cycle in 2023 compared to the previous year, it is essential for the company to continue monitoring and optimizing its working capital management practices to ensure efficient cash flow operations.
Peer comparison
Dec 31, 2023