CNH Industrial N.V. (CNH)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 130.76 | 147.24 | 138.86 | 137.64 | 120.44 | 138.36 | 137.53 | 129.15 | 105.82 | 104.01 | 109.83 | 112.85 | 153.41 | 430.99 | 331.10 | 260.66 | 197.10 | 118.31 | 121.88 | 127.53 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 130.76 | 147.24 | 138.86 | 137.64 | 120.44 | 138.36 | 137.53 | 129.15 | 105.82 | 104.01 | 109.83 | 112.85 | 153.41 | 430.99 | 331.10 | 260.66 | 197.10 | 118.31 | 121.88 | 127.53 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 130.76 + — – —
= 130.76
The cash conversion cycle of CNH Industrial N.V. has shown fluctuations over the years. It measures the time it takes for a company to convert its investment in inventory and other inputs into cash flows from sales.
From March 31, 2020, to June 30, 2020, there was a slight decrease in the cash conversion cycle duration, indicating an improvement in efficiency. However, it increased significantly by December 31, 2020, which could be a cause for concern as it suggests a longer cash cycle.
The cycle continued to deteriorate in the following quarters, reaching its peak on September 30, 2021. This could signal inefficiencies in inventory management or delays in collecting receivables, leading to a longer operating cycle.
By December 31, 2021, there was a notable improvement in the cash conversion cycle, suggesting that the company may have implemented strategies to enhance working capital management. However, fluctuations were still observed in the subsequent quarters.
As of December 31, 2024, the cash conversion cycle decreased to 130.76 days, indicating potential improvements in managing inventory, payables, and receivables. Overall, consistent monitoring and optimization of the cash conversion cycle are essential for CNH Industrial N.V. to maintain liquidity and operational efficiency.
Peer comparison
Dec 31, 2024