BorgWarner Inc (BWA)
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 | 39.92 | 41.21 | 34.98 | 46.73 | 56.86 |
| Days of sales outstanding (DSO) | days | 73.67 | 79.93 | 71.38 | 71.29 | 104.81 |
| Number of days of payables | days | — | — | 77.14 | 69.33 | — |
| Cash conversion cycle | days | 113.59 | 121.13 | 29.22 | 48.69 | 161.68 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.92 + 73.67 – —
= 113.59
Based on the data provided, BorgWarner Inc's cash conversion cycle has shown fluctuations over the past five years.
In December 31, 2020, the cash conversion cycle was high at 161.68 days, indicating that the company took a relatively long time to convert its resources into cash.
However, there was a significant improvement in the cash conversion cycle by the end of December 31, 2022, with the cycle reducing to 29.22 days. This decrease suggests that BorgWarner Inc was able to manage its cash more efficiently and convert its resources into cash at a faster rate.
In the following years, December 31, 2023, and December 31, 2024, the cash conversion cycle increased to 121.13 days and 113.59 days, respectively. Although the cycle lengthened compared to December 31, 2022, it remained lower than the base year of 2020, indicating improved efficiency in cash management compared to the initial period.
Overall, BorgWarner Inc experienced fluctuations in its cash conversion cycle over the period analyzed, with some years showing substantial improvements compared to the base year. It is essential for the company to continuously monitor and manage its cash conversion cycle to ensure efficient use of resources and maintain financial stability.
Peer comparison
Dec 31, 2024