Axalta Coating Systems Ltd (AXTA)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.26 | 66.18 | 60.78 | 61.66 | 61.02 | 59.52 | 61.08 | 64.08 | 67.66 | 68.70 | 68.28 | 67.20 | 61.37 | 69.19 | 64.54 | 66.73 | 64.12 | 60.83 | 58.72 | 59.82 |
| Days of sales outstanding (DSO) | days | 86.34 | 90.03 | 88.13 | 87.27 | 88.71 | 92.69 | 91.81 | 85.48 | 79.76 | 84.44 | 86.67 | 83.04 | 77.48 | 88.04 | 88.08 | 86.27 | 84.94 | 79.98 | 63.09 | 65.30 |
| Number of days of payables | days | 51.41 | 57.28 | 58.33 | 59.19 | 59.70 | 56.33 | 55.95 | 56.45 | 59.82 | 61.84 | 63.78 | 65.79 | 60.25 | 63.54 | 62.75 | 64.76 | 64.64 | 54.74 | 36.14 | 49.15 |
| Cash conversion cycle | days | 92.19 | 98.93 | 90.58 | 89.74 | 90.03 | 95.87 | 96.94 | 93.11 | 87.60 | 91.29 | 91.18 | 84.44 | 78.61 | 93.70 | 89.87 | 88.24 | 84.43 | 86.07 | 85.67 | 75.97 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.26 + 86.34 – 51.41
= 92.19
The cash conversion cycle of Axalta Coating Systems Ltd has shown fluctuations over the specified period, ranging from a low of 75.97 days to a high of 98.93 days. This metric measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing the trend, we observe an increase in the cash conversion cycle from March 31, 2020, to December 31, 2020, indicating possible challenges in efficiently managing the company's working capital. There was a slight improvement in the cycle by March 31, 2021, but the trend remained volatile over the subsequent quarters.
The period between September 30, 2021, and December 31, 2022, saw fluctuations within a relatively narrow range, suggesting some efforts to stabilize the cash conversion cycle. However, the cycle increased notably by March 31, 2023, and continued to rise until peaking at 98.93 days by September 30, 2024.
Overall, the increasing trend in the cash conversion cycle indicates potential inefficiencies in inventory management, collections from customers, or payment to suppliers. It could also imply possible challenges in optimizing the company's working capital and liquidity position, which may require management's attention to enhance operational efficiency and cash flow management.
Peer comparison
Dec 31, 2024