Allegion PLC (ALLE)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 73.39 | 77.35 | 89.68 | 83.52 | 67.05 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 73.39 | 77.35 | 89.68 | 83.52 | 67.05 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.39 + — – —
= 73.39
The cash conversion cycle for Allegion PLC has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 67.05 days, indicating that Allegion was able to convert its investments in inventory and accounts receivable into cash relatively quickly.
However, by December 31, 2021, the cash conversion cycle increased to 83.52 days, suggesting a slower conversion of inventory and receivables into cash. This longer cycle may indicate potential inefficiencies in managing inventory or collecting receivables.
By December 31, 2022, the cash conversion cycle further extended to 89.68 days, reaching its peak during the period analyzed. This prolonged cycle may have put pressure on the company's liquidity and working capital management.
By December 31, 2023, there was a slight improvement in the cash conversion cycle, which decreased to 77.35 days. This improvement could indicate efforts to enhance inventory turnover and accounts receivable collection processes.
Finally, as of December 31, 2024, the cash conversion cycle decreased further to 73.39 days, suggesting a continued focus on improving working capital efficiency. It is essential for Allegion PLC to monitor and manage its cash conversion cycle to optimize its liquidity and operational performance over time.