American Axle & Manufacturing (AXL)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.00 | 32.31 | 33.22 | 33.78 | 28.58 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 30.00 | 32.31 | 33.22 | 33.78 | 28.58 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.00 + — – —
= 30.00
The cash conversion cycle of American Axle & Manufacturing has shown a steady increase over the years, from 28.58 days as of December 31, 2020, to 30.00 days as of December 31, 2024. This indicates that the company is taking slightly longer to convert its investments in inventory into cash.
The cash conversion cycle is a measure of how efficiently a company manages its working capital. A longer cash conversion cycle suggests that the company may be facing challenges in efficiently managing its inventory, accounts receivable, and accounts payable.
While the trend is generally important, it is also essential to benchmark the company's cash conversion cycle against industry averages to gain a better understanding of its performance in managing working capital. Further analysis and comparison with industry peers would provide more insights into the company's operational efficiency and financial health.
Peer comparison
Dec 31, 2024