Alamo Group Inc (ALG)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 102.38 | 109.21 | 112.61 | 111.48 | 111.11 | 111.57 | 113.55 | 113.99 | 113.17 | 120.16 | 119.56 | 124.69 | 117.17 | 110.95 | 103.91 | 104.92 | 96.33 | 100.83 | 104.16 | 113.14 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 102.38 | 109.21 | 112.61 | 111.48 | 111.11 | 111.57 | 113.55 | 113.99 | 113.17 | 120.16 | 119.56 | 124.69 | 117.17 | 110.95 | 103.91 | 104.92 | 96.33 | 100.83 | 104.16 | 113.14 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.38 + — – —
= 102.38
The cash conversion cycle of Alamo Group Inc has exhibited fluctuations over the quarters from March 31, 2020, to December 31, 2024. Initially, the company's cash conversion cycle was 113.14 days, indicating that it took approximately 113 days to convert its investments in inventory into cash receipts from customers.
Over the subsequent quarters, the cash conversion cycle showed a general downward trend, reaching its lowest level of 96.33 days on December 31, 2020. This suggests an improvement in the efficiency of Alamo Group's operating cycle, potentially through better inventory management and quicker collection of receivables.
However, from March 31, 2021, the trend reversed, with the cash conversion cycle gradually increasing to 124.69 days on March 31, 2022. This suggests a slowdown in the company's ability to convert inventory into cash, potentially indicating issues with sales, production, or collections.
From June 30, 2022, to December 31, 2024, there was a fluctuation in the cash conversion cycle, with some periods showing improvements while others witnessed slight increases. The cycle varied between 102.38 days to 120.16 days during this period, indicating some degree of instability in the company's working capital management.
Overall, a high cash conversion cycle indicates that Alamo Group Inc is taking longer to convert its investments in inventory and receivables into cash. This may have implications for the company's liquidity position, operational efficiency, and overall financial health, warranting further analysis and potential strategic adjustments.
Peer comparison
Dec 31, 2024