Carlisle Companies Incorporated (CSL)
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 | 44.71 | 52.76 | 50.83 | 40.96 | 59.87 |
| Days of sales outstanding (DSO) | days | 48.96 | 55.53 | 61.81 | 56.33 | 63.73 |
| Number of days of payables | days | 30.35 | 27.86 | 36.32 | 26.93 | 38.38 |
| Cash conversion cycle | days | 63.33 | 80.44 | 76.32 | 70.36 | 85.22 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.71 + 48.96 – 30.35
= 63.33
The cash conversion cycle of Carlisle Companies Inc. has shown fluctuations over the past five years. In 2021, the company's cash conversion cycle was at its highest level at 79.84 days, indicating a longer period for the company to convert its investments in inventory into cash. However, there was a slight improvement in 2023, with the cash conversion cycle decreasing to 63.33 days.
The cash conversion cycle measures the time it takes for a company to convert its investment in inventory into cash from sales of the inventory, taking into account the time it takes to sell the inventory, collect receivables, and pay suppliers. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital.
Despite the fluctuations in the cash conversion cycle over the years, it is important for Carlisle Companies Inc. to continue monitoring and managing its working capital effectively to ensure optimal cash flow and operational efficiency.
Peer comparison
Dec 31, 2023