Carrier Global Corp (CARR)
Cash conversion cycle
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 222.49 | 360.76 | 221.38 | 199.32 |
Days of sales outstanding (DSO) | days | 42.20 | 47.07 | 43.22 | 55.53 |
Number of days of payables | days | 275.18 | 387.14 | 262.29 | 236.89 |
Cash conversion cycle | days | -10.49 | 20.69 | 2.32 | 17.96 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 222.49 + 42.20 – 275.18
= -10.49
To analyze Carrier Global Corp's cash conversion cycle over the past five years, we observe a fluctuating trend. In 2019, the company's cash conversion cycle was 43.26 days, which decreased to 49.07 days in 2020, indicating a less efficient cash conversion process. However, in 2021, the cycle improved to 33.47 days, reflecting a shorter time taken to convert inputs into cash inflows.
By the end of 2022, the cash conversion cycle further decreased to 45.93 days, suggesting a slight increase in the time it takes for the company to convert its investments in inventory and other resources into cash receipts. Notably, in 2023, there was a significant improvement in the cash conversion cycle to 28.79 days, signaling enhanced efficiency in managing working capital and cash flows.
Overall, although the cash conversion cycle has displayed some variability over the years, the recent improvement in 2023 indicates that Carrier Global Corp has been successful in optimizing its working capital management, potentially leading to better liquidity and operational performance.
Peer comparison
Dec 31, 2023