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.