Armstrong World Industries Inc (AWI)
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 | 25.06 | 27.97 | 24.25 | 26.86 | 21.94 |
| Days of sales outstanding (DSO) | days | 32.47 | 33.35 | 36.30 | 31.31 | 30.00 |
| Number of days of payables | days | 28.51 | 32.40 | 33.90 | 32.30 | 28.64 |
| Cash conversion cycle | days | 29.02 | 28.92 | 26.65 | 25.87 | 23.30 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.06 + 32.47 – 28.51
= 29.02
Armstrong World Industries Inc.'s cash conversion cycle has fluctuated over the past five years, ranging from 79.06 days in 2023 to 85.02 days in 2022. The company's cash conversion cycle indicates the average time it takes to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it implies that the company is more efficient in managing its working capital.
Although there have been slight fluctuations in the cash conversion cycle, the overall trend appears relatively stable, with values ranging within a narrow band between 79.06 and 85.02 days. This indicates that Armstrong World Industries Inc. has been able to consistently manage its working capital effectively over the years.
Analyzing the trend over the past five years, it seems that there has not been a significant improvement or deterioration in the company's efficiency in managing its working capital in converting its resources into cash flows. Further analysis and comparison with industry benchmarks would be beneficial to gain a deeper understanding of Armstrong World Industries Inc.'s efficiency in managing its cash conversion cycle.
Peer comparison
Dec 31, 2023