Deluxe Corporation (DLX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 13.35 | 14.92 | 18.48 | 14.42 | 20.04 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 13.35 | 14.92 | 18.48 | 14.42 | 20.04 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 13.35 + — – —
= 13.35
The cash conversion cycle of Deluxe Corporation has shown fluctuations over the past five years. In 2020, the company's cash conversion cycle was 20.04 days, indicating that it took approximately 20 days to convert its investments in inventory and accounts receivable into cash.
By the end of 2021, the cash conversion cycle decreased to 14.42 days, suggesting an improvement in the company's efficiency in managing its working capital. However, in 2022, the cycle increased to 18.48 days, indicating a slightly slower conversion of assets into cash compared to the previous year.
In 2023, there was a slight improvement in the cash conversion cycle, reducing to 14.92 days. This reduction suggests that the company was able to speed up its cash conversion process compared to the previous year.
By the end of 2024, Deluxe Corporation further improved its cash conversion cycle to 13.35 days, indicating a more efficient management of working capital and a quicker conversion of assets into cash.
Overall, the trend in the cash conversion cycle of Deluxe Corporation shows some variability, with fluctuations in efficiency in converting investments in inventory and accounts receivable into cash over the past five years. It is important for the company to continue monitoring and managing its working capital effectively to ensure optimal cash flow and operational performance.