Dorman Products Inc (DORM)
Cash conversion cycle
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 214.83 | 202.96 | 188.49 | 186.27 | 186.14 | 177.31 | 185.54 | 204.98 | 235.96 | 226.47 | 222.23 | 213.30 | 220.07 | 215.47 | 169.85 | 171.15 | 153.65 | 151.82 | 153.11 | 141.15 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 214.83 | 202.96 | 188.49 | 186.27 | 186.14 | 177.31 | 185.54 | 204.98 | 235.96 | 226.47 | 222.23 | 213.30 | 220.07 | 215.47 | 169.85 | 171.15 | 153.65 | 151.82 | 153.11 | 141.15 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 214.83 + — – —
= 214.83
The cash conversion cycle of Dorman Products Inc has displayed fluctuations over the years, ranging from a low of 141.15 days to a high of 235.96 days. The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing the trend, we observe that the cash conversion cycle generally increased from March 2021 to December 2022, peaking at 235.96 days before declining. This extended cycle can indicate inefficiencies in managing inventory, collecting receivables, or delaying payables, which may tie up cash within the operating cycle.
Subsequently, there was a notable decrease in the cash conversion cycle from March 2023 to June 2024, followed by a slight increase in the latest period of December 2024. This downward trend might suggest improvements in inventory management, more efficient collecting of receivables, or better negotiation of payment terms with suppliers.
Overall, a shorter cash conversion cycle indicates better liquidity and efficiency in managing working capital. Dorman Products Inc should continue to monitor and optimize its cash conversion cycle to enhance cash flow management and operational effectiveness.
Peer comparison
Dec 31, 2024