Ametek Inc (AME)
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 | 83.53 | 99.36 | 95.17 | 77.26 | 68.11 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 83.53 | 99.36 | 95.17 | 77.26 | 68.11 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 83.53 + — – —
= 83.53
The cash conversion cycle (CCC) of Ametek Inc has shown an increasing trend over the past few years. As of December 31, 2020, the CCC stood at 68.11 days, indicating that it took approximately 68 days for the company to convert its investments in inventory and accounts receivable into cash.
By December 31, 2021, the CCC had increased to 77.26 days, suggesting a slight elongation in the company's cash conversion process. Subsequently, by December 31, 2022, the CCC continued to rise to 95.17 days, showing a significant increase in the time taken by Ametek to convert its resources into cash.
The trend persisted in the following years, with the CCC reaching 99.36 days by December 31, 2023. This prolonged cash conversion cycle may indicate potential liquidity challenges or inefficiencies in managing inventory and receivables.
However, there was a slight improvement by December 31, 2024, with the CCC decreasing to 83.53 days. Despite the improvement, the CCC remains elevated compared to previous years, suggesting that Ametek Inc may still be facing challenges in optimizing its working capital and cash flow management processes.
Overall, the increasing trend in the cash conversion cycle of Ametek Inc indicates the need for the company to focus on improving its efficiency in converting investments into cash to enhance liquidity and operational performance.
Peer comparison
Dec 31, 2024