Armstrong World Industries Inc (AWI)
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 | 25.19 | 26.95 | 27.50 | 28.56 | 28.13 | 29.88 | 28.72 | 28.02 | 24.57 | 26.34 | 25.37 | 26.48 | 27.13 | 26.44 | 25.06 | 22.42 | 22.15 | 22.54 | 23.12 | 23.53 |
| Days of sales outstanding (DSO) | days | 32.47 | 33.39 | 34.02 | 35.47 | 33.35 | 36.28 | 40.58 | 36.91 | 36.30 | 36.11 | 34.11 | 36.34 | 31.31 | 34.33 | 39.65 | 33.74 | 29.92 | 32.81 | 36.27 | 32.80 |
| Number of days of payables | days | 28.65 | 30.07 | 30.47 | 29.09 | 32.58 | 33.70 | 34.95 | 31.50 | 34.35 | 33.95 | 32.15 | 30.17 | 32.62 | 27.40 | 24.35 | 24.48 | 28.91 | 27.06 | 26.78 | 32.12 |
| Cash conversion cycle | days | 29.01 | 30.27 | 31.05 | 34.94 | 28.90 | 32.47 | 34.35 | 33.43 | 26.52 | 28.50 | 27.33 | 32.65 | 25.82 | 33.37 | 40.36 | 31.67 | 23.16 | 28.30 | 32.62 | 24.21 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.19 + 32.47 – 28.65
= 29.01
Armstrong World Industries Inc.'s cash conversion cycle has shown some fluctuations over the past eight quarters. The company's cash conversion cycle, a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flow from sales, ranged from 79.06 days to 94.75 days over this period.
In general, a shorter cash conversion cycle is preferable as it indicates that the company is able to efficiently manage its working capital and convert its resources into cash quickly. A longer cash conversion cycle may suggest inefficiencies in inventory management, collection of receivables, or payment of payables.
For Armstrong World Industries, the cash conversion cycle ranged from a low of 79.06 days in Q4 2023 to a high of 94.75 days in Q2 2022. The decreasing trend from Q2 2022 to Q4 2023 indicates an improvement in the company's efficiency in managing its working capital, translating resources into cash faster.
It is important for the company to continue monitoring and managing its cash conversion cycle to ensure optimal utilization of its resources and maintain healthy cash flow levels.
Peer comparison
Dec 31, 2023