Badger Meter Inc (BMI)
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 | 94.41 | 89.85 | 83.30 | 81.01 | 80.91 |
| Days of sales outstanding (DSO) | days | 43.07 | 49.42 | 47.59 | 52.92 | 52.78 |
| Number of days of payables | days | 50.26 | 53.56 | 35.00 | 34.68 | 31.12 |
| Cash conversion cycle | days | 87.22 | 85.72 | 95.88 | 99.25 | 102.57 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 94.41 + 43.07 – 50.26
= 87.22
The cash conversion cycle of Badger Meter Inc. has shown fluctuating trends over the last five years. In 2023, the company's cash conversion cycle increased to 104.73 days compared to 100.60 days in 2022. This indicates that Badger Meter takes a longer time to convert its investments in inventory to cash this year.
Despite the slight increase in 2023, the company has improved its cash conversion cycle performance compared to 2021 and 2020 when the cycle was 117.92 days and 119.11 days, respectively. The improvements over these two years suggest that Badger Meter has become more efficient in managing its inventory, accounts receivable, and accounts payable to optimize cash flow.
Looking back to 2019, Badger Meter Inc. had the longest cash conversion cycle over the past five years at 123.24 days. Since then, the company has successfully reduced this cycle, indicating enhanced operational efficiency and effective working capital management.
Overall, the trend in Badger Meter's cash conversion cycle shows variability, with some periods demonstrating improved efficiency and others showing a slight decline. Continuous monitoring and optimization of the cash conversion cycle will be essential for Badger Meter to maintain healthy cash flows and support its overall financial health in the future.
Peer comparison
Dec 31, 2023