Dorman Products Inc (DORM)

Cash conversion cycle

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	144.04	136.68	145.21	161.17	173.38	167.21	164.22	157.50	162.04	157.59	123.73	123.40	110.58	109.11	109.29	101.59	112.68	113.39	120.26	123.48
Days of sales outstanding (DSO)	days	101.55	92.99	89.94	—	90.79	97.35	97.60	114.36	128.46	135.49	135.68	147.08	153.59	143.13	89.48	153.31	144.26	134.28	136.62	88.40
Number of days of payables	days	39.93	34.61	34.37	34.18	41.25	49.13	52.64	46.21	54.03	49.69	43.86	43.31	43.64	43.43	33.31	28.81	36.29	32.48	42.17	42.01
Cash conversion cycle	days	205.67	195.06	200.79	126.99	222.93	215.44	209.19	225.65	236.47	243.39	215.55	227.16	220.54	208.81	165.46	226.09	220.65	215.19	214.71	169.87

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 144.04 + 101.55 – 39.93
= 205.67

The cash conversion cycle of Dorman Products Inc fluctuated over the past eight quarters, ranging from a low of 223.71 days in Q3 2023 to a high of 269.80 days in Q4 2022. The trend indicates some variability in the company's ability to convert its resources into cash efficiently. It is important to note that a lower cash conversion cycle is generally more favorable, as it signifies that the company is managing its working capital effectively and generating cash quickly from its operations. Conversely, a higher cash conversion cycle may indicate inefficiencies in managing inventory, receivables, and payables, leading to a longer cash cycle and potentially tying up cash in the business for longer periods. Monitoring and analyzing these fluctuations can provide insights into the company's operational efficiency and liquidity management over time.