Cognex Corporation (CGNX)
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 | 102.12 | 74.36 | 69.94 | 42.92 | 47.10 |
Days of sales outstanding (DSO) | days | 51.55 | 46.38 | 47.38 | 58.96 | 54.48 |
Number of days of payables | days | 13.50 | 16.45 | 27.24 | 11.48 | 13.96 |
Cash conversion cycle | days | 140.17 | 104.28 | 90.08 | 90.40 | 87.62 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.12 + 51.55 – 13.50
= 140.17
The cash conversion cycle for Cognex Corp. has shown a fluctuating trend over the past five years. In 2019, the company had a cash conversion cycle of 135.99 days, which increased to 137.90 days in 2020. However, the cycle decreased significantly to 138.18 days in 2021 before experiencing a notable increase to 168.79 days in 2022. The cycle then saw a substantial increase to 268.33 days in 2023.
The upward trend in the cash conversion cycle indicates that Cognex Corp. may be taking longer to convert its investments in inventory into cash. This could potentially point towards issues such as slower inventory turnover or difficulties in collecting receivables efficiently.
A higher cash conversion cycle may also imply that the company is facing challenges in managing its working capital effectively, which can impact its liquidity and overall financial health. It is essential for Cognex Corp. to analyze the underlying reasons for the prolonged cash conversion cycle and implement strategies to streamline its operations and improve cash flow management.
Peer comparison
Dec 31, 2023