DR Horton Inc (DHI)
Cash conversion cycle
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 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 333.37 | 338.95 | 331.91 | 330.78 | 312.76 | 333.02 | 344.31 | 350.69 | 344.03 | 361.35 | 340.87 | 324.53 | 302.27 | 308.41 | 296.49 | 298.13 | 290.55 | 305.54 | 313.16 | 309.04 |
Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Cash conversion cycle | days | 333.37 | 338.95 | 331.91 | 330.78 | 312.76 | 333.02 | 344.31 | 350.69 | 344.03 | 361.35 | 340.87 | 324.53 | 302.27 | 308.41 | 296.49 | 298.13 | 290.55 | 305.54 | 313.16 | 309.04 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 333.37 + — – —
= 333.37
The cash conversion cycle of DR Horton Inc, a key indicator of the efficiency of the company's cash flow management, has fluctuated over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory back into cash.
From December 2019 to September 2020, there was a general increasing trend in the cash conversion cycle, peaking at 361.35 days in June 2022 before showing a slight decrease in the most recent quarter to 333.37 days.
The longer the cash conversion cycle, the longer the company's cash is tied up in the operating cycle, potentially impacting liquidity and profitability. A decreasing trend in the cycle indicates improved efficiency in managing inventory and collections, leading to quicker conversion of sales into cash.
It is important for DR Horton Inc to continuously monitor and optimize its cash conversion cycle to ensure effective management of working capital and sustainable business operations. Maintaining a healthy balance between inventory management, accounts receivable collection, and accounts payable turnover is crucial for the company's financial health and competitiveness in the market.
Peer comparison
Sep 30, 2024