Arcosa Inc (ACA)
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 | 78.67 | 62.93 | 70.92 | 65.03 | 73.62 |
| Days of sales outstanding (DSO) | days | 56.48 | 54.39 | 55.71 | 49.07 | 42.03 |
| Number of days of payables | days | 53.36 | 38.00 | 40.36 | 33.85 | 23.39 |
| Cash conversion cycle | days | 81.79 | 79.32 | 86.26 | 80.24 | 92.26 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.67 + 56.48 – 53.36
= 81.79
The cash conversion cycle of Arcosa Inc has varied over the past five years, ranging from 79.48 days to 92.26 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A lower number is generally preferable as it indicates that the company is efficiently managing its working capital.
In 2023, Arcosa Inc's cash conversion cycle increased slightly to 81.79 days compared to the previous year. This may indicate that there was a longer period between investing in inventory and receiving cash from sales. However, the company still managed to keep its cash conversion cycle below the 2021 level of 86.26 days, which is positive.
Overall, while there have been fluctuations in the cash conversion cycle of Arcosa Inc over the years, the company appears to have maintained a relatively efficient working capital management strategy. Monitoring this metric closely can help assess the company's liquidity and operational efficiency.
Peer comparison
Dec 31, 2023