Badger Meter Inc (BMI)
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 | 105.24 | 131.31 | 126.58 | 121.31 | 115.74 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 105.24 | 131.31 | 126.58 | 121.31 | 115.74 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 105.24 + — – —
= 105.24
The cash conversion cycle of Badger Meter Inc has shown an increasing trend over the past five years, starting from 115.74 days as of December 31, 2020, and reaching a peak of 131.31 days by December 31, 2023. However, there was a significant improvement in the most recent period, as of December 31, 2024, with a decrease to 105.24 days.
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A longer cash conversion cycle indicates that the company takes more time to convert its resources into cash, potentially tying up capital and impacting liquidity.
The fluctuation in Badger Meter Inc's cash conversion cycle could be influenced by various factors such as inventory management efficiency, payment terms with suppliers, and collection periods from customers. The improvement in 2024 suggests potential enhancements in managing working capital and optimizing operational processes to shorten the cycle and improve cash flow efficiency.
Overall, monitoring and managing the cash conversion cycle is crucial for Badger Meter Inc to ensure optimal liquidity and operational efficiency.
Peer comparison
Dec 31, 2024