Arrow Electronics Inc (ARW)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 69.79 | 66.10 | 65.35 | 63.90 | 65.38 | 70.13 | 63.65 | 62.94 | 60.13 | 58.00 | 56.90 | 55.25 | 50.66 | 46.68 | 45.78 | 43.82 | 47.09 | 48.27 | 51.38 | 48.73 |
| Days of sales outstanding (DSO) | days | 170.33 | 150.24 | 133.91 | 129.03 | 134.92 | 112.55 | 112.39 | — | 121.15 | — | — | — | 117.77 | — | — | — | — | — | — | — |
| Number of days of payables | days | 163.71 | 137.07 | 123.13 | 119.09 | 126.93 | 109.81 | 104.84 | 102.25 | 118.25 | 108.85 | 106.69 | 108.37 | 115.95 | 97.44 | 96.01 | 94.25 | 113.70 | 102.18 | 104.64 | 97.36 |
| Cash conversion cycle | days | 76.42 | 79.27 | 76.13 | 73.84 | 73.38 | 72.87 | 71.19 | -39.30 | 63.04 | -50.85 | -49.79 | -53.11 | 52.48 | -50.76 | -50.23 | -50.44 | -66.61 | -53.91 | -53.26 | -48.63 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.79 + 170.33 – 163.71
= 76.42
The cash conversion cycle of Arrow Electronics Inc has exhibited fluctuations over the analyzed periods. Initially, the company had negative cash conversion cycle values, indicating efficient management of working capital and quick conversion of inventory and receivables into cash.
However, starting from December 31, 2021, the cash conversion cycle turned positive, reaching 52.48 days. This suggests that Arrow Electronics was taking longer to convert its resources into cash, potentially due to changes in inventory holding periods or collection times on receivables.
The cycle continued to increase over the subsequent quarters, hitting 79.27 days on September 30, 2024. A prolonged cash conversion cycle can signify inefficiencies in working capital management, potentially leading to increased financing costs or liquidity constraints.
Overall, a rising trend in the cash conversion cycle for Arrow Electronics signals a need for closer monitoring of working capital components to optimize cash flow and maintain financial stability.
Peer comparison
Dec 31, 2024