Aptiv PLC (APTV)

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	45.41	44.98	50.51	48.83	42.55
Days of sales outstanding (DSO)	days	65.86	69.45	76.13	70.86	84.25
Number of days of payables	days	56.18	59.92	68.00	71.59	84.34
Cash conversion cycle	days	55.09	54.50	58.65	48.10	42.46

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.41 + 65.86 – 56.18
= 55.09

The cash conversion cycle for Aptiv PLC has shown an increasing trend over the past five years. In 2020, the company had a cash conversion cycle of 42.46 days, which increased to 48.10 days in 2021, and continued to rise to 58.65 days in 2022. However, there was a slight decrease in 2023 to 54.50 days, followed by a small increase to 55.09 days in 2024.

This trend indicates that Aptiv PLC is taking longer to convert its investments in inventory and accounts receivable into cash. A longer cash conversion cycle may suggest inefficiencies in managing working capital and could potentially impact the company's liquidity and cash flow position. It would be important for the company to closely monitor and address the factors contributing to this trend to improve its operational efficiency and financial performance.