Allegion PLC (ALLE)
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 | 73.39 | 78.69 | 78.53 | 80.22 | 77.35 | 82.73 | 84.00 | 84.30 | 89.68 | 93.71 | 90.27 | 86.48 | 83.52 | 76.60 | 69.00 | 67.99 | 67.05 | 68.91 | 69.70 | 62.64 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 73.39 | 78.69 | 78.53 | 80.22 | 77.35 | 82.73 | 84.00 | 84.30 | 89.68 | 93.71 | 90.27 | 86.48 | 83.52 | 76.60 | 69.00 | 67.99 | 67.05 | 68.91 | 69.70 | 62.64 |
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 fluctuations over the reported periods, indicating changes in the efficiency of the company's working capital management. 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.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 62.64 days to a high of 93.71 days. In general, a shorter cash conversion cycle is favorable as it signifies that the company is able to quickly convert its resources into cash, indicating efficient operations.
During some periods, such as in 2023 and 2024, the cash conversion cycle decreased, reflecting potential improvements in managing inventory, collecting receivables, and paying payables. Conversely, the cycle increased in the latter part of 2022, indicating potential challenges in working capital management.
It is essential for Allegion PLC to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of resources and maintain healthy liquidity levels. By analyzing trends in this metric, the company can identify areas for improvement and implement strategies to enhance efficiency in its working capital cycle.