Amphenol Corporation (APH)
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 | 93.38 | 88.91 | 92.49 | 89.93 | 85.25 |
| Days of sales outstanding (DSO) | days | 76.12 | 76.09 | 82.38 | 82.84 | 77.05 |
| Number of days of payables | days | 58.21 | 55.59 | 64.07 | 68.92 | 56.40 |
| Cash conversion cycle | days | 111.29 | 109.40 | 110.81 | 103.84 | 105.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.38 + 76.12 – 58.21
= 111.29
The cash conversion cycle of Amphenol Corp. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 111.29 days from 109.40 days in 2022. This indicates that it took the company longer to convert its investments in inventory and receivables into cash during the year.
Comparing to previous years, the cash conversion cycle in 2023 was higher than the cycle in 2021 and 2020, which suggests some inefficiencies in managing its working capital during the year. Despite this increase, the cycle was still lower than the cycles in 2019 and 2021.
Overall, a higher cash conversion cycle may indicate potential issues in the company's operations, such as slow inventory turnover or collection of receivables, which can impact its liquidity and profitability. It is important for Amphenol Corp. to monitor and optimize its cash conversion cycle to ensure efficient management of its working capital.