Carrier Global Corp (CARR)
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 | 40.63 | 182.95 | 360.76 | 221.38 | 199.32 |
| Days of sales outstanding (DSO) | days | 42.27 | 35.38 | 47.07 | 43.22 | 55.53 |
| Number of days of payables | days | 43.44 | 249.19 | 387.14 | 262.29 | 236.89 |
| Cash conversion cycle | days | 39.46 | -30.86 | 20.69 | 2.32 | 17.96 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.63 + 42.27 – 43.44
= 39.46
The cash conversion cycle of Carrier Global Corp has shown fluctuation over the years, ranging from 2.32 days to 39.46 days.
On December 31, 2021, the company's cash conversion cycle was notably efficient at 2.32 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash quickly during that period.
However, by December 31, 2023, the cash conversion cycle turned negative at -30.86 days, suggesting that Carrier Global Corp was able to generate cash before having to pay suppliers or other obligations. This negative cash conversion cycle could indicate strong management of working capital and efficient cash flow management during the year.
On December 31, 2024, the cash conversion cycle increased significantly to 39.46 days, indicating a longer time for the company to convert its investments in inventory and accounts receivable into cash. This increase may warrant further investigation into the underlying reasons for the slowdown in cash conversion.
Overall, fluctuations in the cash conversion cycle of Carrier Global Corp demonstrate varying levels of efficiency in managing working capital and cash flow throughout the years, highlighting the importance of monitoring and optimizing these cycles for financial performance.
Peer comparison
Dec 31, 2024