Dover Corporation (DOV)
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 | 61.42 | 68.16 | 63.98 | 51.41 | 65.16 |
| Days of sales outstanding (DSO) | days | 62.92 | 65.98 | 63.05 | 63.11 | 62.25 |
| Number of days of payables | days | 48.04 | 53.28 | 57.67 | 52.52 | 74.41 |
| Cash conversion cycle | days | 76.30 | 80.86 | 69.36 | 62.00 | 53.00 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.42 + 62.92 – 48.04
= 76.30
The cash conversion cycle of Dover Corp. has shown fluctuating trends over the past five years. The company's cash conversion cycle increased from 47.93 days in 2019 to 85.08 days in 2022, indicating a longer period for the company to convert its investments in inventory and other resources into cash.
However, there was an improvement in 2023 as the cash conversion cycle decreased to 80.14 days. Despite this improvement, the cycle still remains higher compared to 2019.
This trend suggests that Dover Corp. may be facing challenges in managing its working capital efficiently, potentially leading to longer cash conversion cycles. Management should focus on streamlining operations, improving inventory turnover, and optimizing accounts receivable and accounts payable processes to reduce the cash conversion cycle and enhance overall liquidity and financial performance.
Peer comparison
Dec 31, 2023