Smith AO Corporation (AOS)
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 | 58.06 | 61.57 | 60.95 | 59.55 | 60.65 | 60.51 | 56.28 | 57.34 | 55.55 | 46.52 | 45.03 | 44.86 | 44.35 | 45.54 | 46.20 | 46.07 | 43.48 | 43.95 | 45.64 | 44.24 |
| Days of sales outstanding (DSO) | days | 56.64 | 56.62 | 57.73 | 57.41 | 56.65 | 54.11 | 58.96 | 59.32 | 65.51 | 67.46 | 68.81 | 64.55 | 73.91 | 74.54 | 67.93 | 66.58 | 72.10 | 73.59 | 75.40 | 76.54 |
| Number of days of payables | days | 70.09 | 66.64 | 65.33 | 65.07 | 73.49 | 68.57 | 71.29 | 77.29 | 92.55 | 84.49 | 83.46 | 78.50 | 87.97 | 77.80 | 65.78 | 65.20 | 73.13 | 68.49 | 68.99 | 68.13 |
| Cash conversion cycle | days | 44.62 | 51.55 | 53.35 | 51.89 | 43.81 | 46.05 | 43.95 | 39.37 | 28.51 | 29.50 | 30.38 | 30.91 | 30.29 | 42.28 | 48.35 | 47.45 | 42.45 | 49.05 | 52.05 | 52.64 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.06 + 56.64 – 70.09
= 44.62
The cash conversion cycle of A.O. Smith Corp. has shown some fluctuations in recent quarters. In Q4 2023, the company's cash conversion cycle was 40.59 days, which decreased from the previous quarter. This indicates that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently in Q4 2023.
However, compared to the same quarter the previous year, the cash conversion cycle was slightly higher, suggesting potential challenges in managing working capital in the current period. The trend of the cash conversion cycle in the last year shows some variability, with peaks in Q2 and Q3 2023.
Overall, A.O. Smith Corp. should continue to monitor and analyze its cash conversion cycle closely to ensure effective management of its working capital and optimize its cash flow operations.
Peer comparison
Dec 31, 2023