Arcosa Inc (ACA)
Cash conversion cycle
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.67 | 73.35 | 71.84 | 65.81 | 63.33 | 65.08 | 59.53 | 71.55 | 70.92 | 77.97 | 80.16 | 69.32 | 65.03 | 68.37 | 75.70 | 75.69 | 73.62 | 92.66 | 86.97 |
| Days of sales outstanding (DSO) | days | 56.48 | 63.88 | 63.03 | 63.68 | 54.39 | 52.57 | 57.57 | 63.98 | 55.71 | 67.36 | 60.24 | 55.90 | 49.07 | 44.19 | 42.30 | 47.90 | 42.03 | 46.80 | 52.24 |
| Number of days of payables | days | 53.36 | 49.71 | 48.36 | 41.25 | 38.24 | 43.86 | 44.30 | 47.73 | 40.36 | 48.27 | 47.59 | 42.10 | 33.85 | 32.33 | 26.11 | 28.24 | 23.39 | 25.00 | 21.82 |
| Cash conversion cycle | days | 81.79 | 87.52 | 86.51 | 88.23 | 79.48 | 73.79 | 72.80 | 87.80 | 86.26 | 97.05 | 92.81 | 83.11 | 80.24 | 80.23 | 91.89 | 95.36 | 92.26 | 114.45 | 117.39 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.67 + 56.48 – 53.36
= 81.79
Arcosa Inc's cash conversion cycle measures how long it takes for the company to convert its investments in inventory and accounts receivable into cash flows from sales. A longer cash conversion cycle indicates that the company is taking longer to generate cash from its operational activities.
From the data provided, we observe a fluctuating trend in Arcosa Inc's cash conversion cycle over the past eight quarters. In Q4 2023, the cash conversion cycle was 81.79 days, showing an improvement from Q3 2023 where it was 87.43 days. This reduction suggests that the company was able to more efficiently convert its inventory and accounts receivable into cash during this period.
Looking at the historical data, we notice that the cash conversion cycle has experienced variability over the quarters, reaching its lowest point in Q3 2022 at 73.86 days and the highest point in Q1 2023 at 88.21 days. This indicates inconsistencies in the company's cash conversion efficiency over time.
Overall, Arcosa Inc's management should continue monitoring and managing the cash conversion cycle effectively to ensure optimal utilization of resources and liquidity. Consistent efforts to streamline operations, improve inventory management, and accelerate accounts receivable collections can help reduce the cash conversion cycle and enhance the company's cash flow generation.
Peer comparison
Dec 31, 2023