Alamo Group Inc (ALG)
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 | 111.47 | 113.17 | 117.17 | 101.77 | 115.53 |
| Days of sales outstanding (DSO) | days | 78.21 | 76.80 | 65.56 | 67.59 | 81.78 |
| Number of days of payables | days | 29.44 | 31.31 | 37.02 | 31.61 | 35.39 |
| Cash conversion cycle | days | 160.25 | 158.66 | 145.71 | 137.76 | 161.93 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 111.47 + 78.21 – 29.44
= 160.25
The cash conversion cycle of Alamo Group Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 160.25 days compared to 158.66 days in 2022. This indicates that it took the company longer to convert its investments in inventory and accounts receivable into cash in 2023.
However, looking back to 2021 and 2020, the cash conversion cycle had improved to 145.71 days and 132.38 days, respectively, suggesting the company was more efficient in managing its working capital during those years.
The cash conversion cycle was notably higher in 2019 at 161.90 days, indicating a longer period needed to convert its resources into cash during that year.
Overall, the trend of the cash conversion cycle for Alamo Group Inc. has been somewhat volatile, with fluctuations observed from year to year. It would be important for the company to closely monitor and manage its working capital to improve efficiency in converting investments into cash in a timely manner.
Peer comparison
Dec 31, 2023