Brinks Company (BCO)

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	—	—	37.61	35.41	17.70
Days of sales outstanding (DSO)	days	63.29	74.81	64.72	71.40	67.46
Number of days of payables	days	24.59	31.26	23.82	26.13	23.78
Cash conversion cycle	days	38.70	43.55	78.50	80.67	61.38

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 63.29 – 24.59
= 38.70

The cash conversion cycle measures the amount of time it takes for a company, in this case, Brink`s Co., to convert its investments in inventory into cash flows from sales. A shorter cash conversion cycle indicates that the company is more efficient in managing its working capital.

From the data provided, we can observe fluctuations in Brink`s Co.`s cash conversion cycle over the past five years. In 2023, Brink`s Co. improved its cash conversion cycle to 35.04 days from 40.24 days in 2022, reflecting a more efficient utilization of its working capital. This improvement suggests that the company was able to sell its inventory and collect cash from customers more rapidly in 2023.

Comparing the data further back, we see that Brink`s Co. exhibited a decreasing trend in its cash conversion cycle from 43.35 days in 2020 to 35.04 days in 2023. This trend indicates that the company has been enhancing its operational efficiency over the years, which is a positive sign for investors and stakeholders.

Overall, Brink`s Co. has shown a consistent effort in optimizing its cash conversion cycle, which is crucial for ensuring financial stability and liquidity in the company. This positive trend suggests that Brink`s Co. has been effectively managing its working capital and turning its investments into cash inflows efficiently over the years.