Ametek Inc (AME)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	81.63	79.36	81.12	83.09	79.14	79.26	75.77	69.11	64.10	65.35	66.97	61.38	56.71	57.61	59.32	59.21	55.56	55.87	57.48	58.87
Days of sales outstanding (DSO)	days	56.75	53.34	53.95	53.03	55.31	53.78	55.35	54.64	55.37	54.33	56.77	55.38	47.46	47.54	46.48	50.49	53.37	54.97	55.54	56.87
Number of days of payables	days	37.24	35.51	35.71	39.13	37.67	40.54	42.38	40.22	39.19	39.49	42.02	40.33	36.55	32.00	32.21	33.84	33.56	34.22	35.39	37.28
Cash conversion cycle	days	101.14	97.19	99.37	96.99	96.77	92.51	88.74	83.53	80.28	80.19	81.72	76.43	67.62	73.14	73.59	75.87	75.38	76.62	77.64	78.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.63 + 56.75 – 37.24
= 101.14

The cash conversion cycle of Ametek Inc has shown a fluctuating trend over the past eight quarters. The cycle increased from 88.72 days in Q1 2022 to its peak at 109.41 days in Q4 2023, a significant rise over this period.

Despite this increase, the company has experienced variations in its efficiency in managing its working capital. There was a general increasing trend in the first half of the data period, with the cycle reaching its highest point in Q4 2023. However, there was a slight decrease in the cycle in Q3 2022.

Overall, the cash conversion cycle indicates that Ametek Inc may be taking longer to convert its investments in inventory and accounts receivable into cash. This could potentially impact the company's liquidity and operational efficiency. Management should closely monitor the factors influencing the cash conversion cycle and implement strategies to optimize working capital management and enhance overall financial performance.