Dover Corporation (DOV)
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 | 61.42 | 63.91 | 69.63 | 69.95 | 68.16 | 71.12 | 70.95 | 69.00 | 64.02 | 58.17 | 55.58 | 54.34 | 51.46 | 55.91 | 63.25 | 63.60 | 65.16 | 65.43 | 68.82 | 67.20 |
| Days of sales outstanding (DSO) | days | 62.92 | 67.75 | 68.23 | 63.35 | 65.98 | 66.26 | 68.16 | 66.14 | 63.01 | 64.74 | 66.03 | 66.48 | 62.88 | 66.59 | 62.23 | 63.34 | 62.25 | 64.61 | 66.33 | 65.59 |
| Number of days of payables | days | 48.04 | 48.47 | 51.31 | 51.72 | 53.28 | 57.76 | 61.66 | 59.31 | 57.71 | 57.73 | 57.22 | 54.97 | 52.58 | 59.99 | 65.15 | 70.68 | 74.41 | 76.34 | 77.83 | 77.25 |
| Cash conversion cycle | days | 76.30 | 83.18 | 86.55 | 81.58 | 80.86 | 79.62 | 77.45 | 75.83 | 69.33 | 65.18 | 64.40 | 65.85 | 61.76 | 62.50 | 60.33 | 56.25 | 53.00 | 53.70 | 57.32 | 55.54 |
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 (CCC) of Dover Corp. measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales. A shorter CCC indicates a more efficient use of working capital.
Looking at the trend over the past few quarters, we see that the CCC has been fluctuating within a range of 78.56 to 91.91 days. In Q2 and Q3 of 2023, the CCC increased to 91.91 days and 87.59 days respectively, which may indicate a slowdown in the company's ability to convert its resources into cash. However, in Q4 of 2023, the CCC decreased to 80.14 days, suggesting a potential improvement in efficiency.
Comparing the current CCC to the same quarter in the previous year, we observe a slight increase from 85.08 days in Q4 of 2022 to 80.14 days in Q4 of 2023. This suggests that Dover Corp. has been slightly more efficient in managing its working capital in the most recent quarter.
Overall, while there have been fluctuations in Dover Corp.'s cash conversion cycle, the trend indicates a relatively stable performance with some potential improvements in efficiency compared to the previous year. It would be important for the company to continue monitoring and managing its working capital effectively to ensure optimal cash flow management.
Peer comparison
Dec 31, 2023