Dorman Products Inc (DORM)

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	133.17	173.38	161.81	110.58	112.52
Days of sales outstanding (DSO)	days	102.20	90.79	128.48	153.59	144.26
Number of days of payables	days	36.91	41.25	53.96	43.64	36.24
Cash conversion cycle	days	198.46	222.93	236.34	220.54	220.55

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 133.17 + 102.20 – 36.91
= 198.46

The cash conversion cycle of Dorman Products Inc has shown a fluctuating trend over the past five years.

In 2023, the cash conversion cycle decreased to 234.79 days from 269.80 days in 2022, indicating an improvement in the company's efficiency in managing its cash inflows and outflows. This suggests that Dorman Products Inc was able to reduce the time it takes to convert its investments in inventory into cash from sales.

In 2021 and 2020, the cash conversion cycle was relatively stable at 274.96 days and 246.96 days respectively. This stability may suggest consistent operational efficiency in terms of managing inventory levels and accounts receivable turnover.

In 2019, there was a slight increase in the cash conversion cycle to 250.92 days compared to the previous year. This increase could indicate a temporary slowdown in the company's ability to efficiently convert its resources into cash.

Overall, the varying performance of Dorman Products Inc's cash conversion cycle over the years signals the importance of closely monitoring working capital management to ensure optimal cash flow efficiency and operational performance.