Dana Inc (DAN)

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	59.55	58.05	66.30	59.69	52.25
Days of sales outstanding (DSO)	days	59.35	58.72	65.88	76.64	57.82
Number of days of payables	days	62.39	66.31	66.60	69.15	54.96
Cash conversion cycle	days	56.51	50.46	65.58	67.18	55.10

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.55 + 59.35 – 62.39
= 56.51

The cash conversion cycle of Dana Inc has shown some variability over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

In 2023, the cash conversion cycle increased to 54.07 days, compared to 47.74 days in 2022. This indicates that Dana Inc took longer to convert its investments into cash during this period. However, the cycle in 2023 was still lower than in 2021 and 2020, suggesting some improvement in efficiency.

Looking back at 2021 and 2020, Dana Inc faced a longer cash conversion cycle of 62.57 days and 63.31 days, respectively. This indicates that the company took longer to generate cash inflows from its operations during those years, which may have impacted its liquidity and working capital management.

In 2019, the cash conversion cycle was relatively lower at 52.24 days compared to the subsequent years. This suggests that Dana Inc was more efficient in converting its investments into cash during that period.

Overall, Dana Inc should focus on managing its inventory, accounts receivable, and accounts payable more effectively to shorten its cash conversion cycle and improve its liquidity position.