American Axle & Manufacturing (AXL)

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	32.31	33.22	33.78	28.58	24.23
Days of sales outstanding (DSO)	days	49.14	51.59	53.99	61.46	45.57
Number of days of payables	days	51.78	52.56	50.45	51.19	40.43
Cash conversion cycle	days	29.67	32.25	37.33	38.85	29.36

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.31 + 49.14 – 51.78
= 29.67

The cash conversion cycle of American Axle & Manufacturing Holdings Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 29.67 days from 32.25 days in 2022. This indicates that the company took fewer days to convert its investments in inventory and accounts receivable into cash during the most recent year.

Comparing to 2021 and 2020, the company's cash conversion cycle has also improved, showing a decreasing trend. In 2021, the cycle was at 37.33 days and reduced to 38.85 days in 2020. This improvement suggests that the company managed its inventory and accounts receivable more efficiently, leading to a more favorable cash conversion cycle.

In 2019, the cash conversion cycle was at 29.36 days, which is similar to the 2023 figure. It indicates that the company was able to maintain a relatively efficient cash conversion cycle over the years.

Overall, the trend in the cash conversion cycle of American Axle & Manufacturing Holdings Inc reflects improvements in managing its working capital, which is crucial for optimizing liquidity and operational efficiency.