Ametek Inc (AME)

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	79.08	76.70	61.98	53.55	54.08
Days of sales outstanding (DSO)	days	56.75	55.27	55.31	47.46	53.62
Number of days of payables	days	36.07	36.52	37.89	34.51	32.66
Cash conversion cycle	days	99.75	95.46	79.39	66.50	75.03

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.08 + 56.75 – 36.07
= 99.75

The cash conversion cycle for Ametek Inc has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle was 109.41 days, representing an increase compared to the previous year. This indicates that it took longer for the company to convert its investments in inventory and accounts receivable into cash during the year.

In 2022, the cash conversion cycle was 104.42 days, which was also higher than in 2021. The company experienced a significant increase in the time it took to convert its resources into cash, reflecting potential inefficiencies in its working capital management.

In 2021, the cash conversion cycle was 84.59 days, showing a decrease from the previous year. This improvement suggests that the company was able to manage its working capital more effectively during this period.

In 2020, the cash conversion cycle was 72.25 days, an indication of efficient working capital management compared to the previous years. The company demonstrated a quicker turnaround in converting its investments into cash during this period.

In 2019, the cash conversion cycle was 79.48 days, showing a slight increase from the previous year. Despite the uptick, the company maintained a relatively efficient cash conversion cycle, although some room for improvement may have existed.

Overall, fluctuations in Ametek Inc's cash conversion cycle reflect the company's varying efficiency in managing its working capital. It is crucial for the company to closely monitor and improve its cash conversion cycle to optimize its cash flow and overall financial performance.