DXP Enterprises Inc (DXPE)
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 | 24.25 | 24.50 | 24.83 | 26.73 | 26.39 | 36.73 | 35.77 | 35.50 | 33.74 | 351.69 | 424.75 | 646.38 | 327.59 | 39.75 | 42.37 | 40.41 | 39.07 | 39.77 | 39.05 | 37.75 |
| Days of sales outstanding (DSO) | days | 69.91 | 71.95 | 74.25 | 73.55 | 81.31 | 77.13 | 79.99 | 71.71 | 76.09 | 76.22 | 74.25 | 67.32 | — | 54.90 | 48.74 | 57.24 | 54.83 | 60.92 | 61.62 | 58.75 |
| Number of days of payables | days | 22.54 | 23.64 | 22.23 | 25.97 | 26.23 | 27.40 | 30.97 | 25.85 | 26.03 | 302.13 | 329.33 | 441.62 | 218.85 | 27.28 | 26.48 | 25.10 | 23.09 | 25.07 | 27.24 | 28.67 |
| Cash conversion cycle | days | 71.62 | 72.81 | 76.85 | 74.30 | 81.46 | 86.45 | 84.78 | 81.36 | 83.80 | 125.78 | 169.67 | 272.08 | 108.74 | 67.38 | 64.62 | 72.55 | 70.81 | 75.62 | 73.44 | 67.83 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.25 + 69.91 – 22.54
= 71.62
The cash conversion cycle of DXP Enterprises Inc has shown fluctuations over the analyzed period. The cycle measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales.
In the most recent quarter, the company's cash conversion cycle was 71.62 days. This indicates that, on average, it takes DXP Enterprises approximately 71.62 days to convert its investments in inventory and accounts receivable into cash received from sales.
The trend of the cash conversion cycle over the past few quarters shows some variability. The cycle was at its highest, 272.08 days, in the second quarter of 2021, indicating a significant lag in converting investments into cash during that period. However, the company managed to significantly improve this metric in subsequent quarters.
Monitoring the cash conversion cycle is crucial for assessing the efficiency of DXP Enterprises' working capital management. A lower cycle reflects a faster turnover of cash and a more efficient operation, while a higher cycle may indicate inefficiencies in managing inventory and accounts receivable.
Peer comparison
Dec 31, 2023