Enovis Corp (ENOV)

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 94.17 88.04 33.61 65.06 61.94
Days of sales outstanding (DSO) days 62.60 64.01 62.14 63.76 63.65
Number of days of payables days 26.61 27.99 14.64 38.04 38.99
Cash conversion cycle days 130.16 124.06 81.10 90.78 86.60

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 94.17 + 62.60 – 26.61
= 130.16

The cash conversion cycle of Enovis Corp has fluctuated over the last five years, indicating changes in its efficiency in managing its working capital. In 2023, the cash conversion cycle increased to 233.69 days from 215.55 days in 2022, reflecting a lengthened period required to convert its investments in inventory and accounts receivable into cash.

The significant increase in the cash conversion cycle in 2023 compared to the prior year suggests potential issues with inventory management, collection of receivables, or payment of payables. A longer cash conversion cycle can tie up cash resources and impact the company's liquidity and ability to fund its operations.

In contrast, the company showed improved efficiency in 2021 with a cash conversion cycle of 104.81 days, a considerable decrease from the previous years. This indicates that Enovis Corp was able to manage its working capital more effectively, possibly through better inventory control, faster collections from customers, or extended payment terms with suppliers.

Overall, monitoring the cash conversion cycle can provide valuable insights into Enovis Corp's operational efficiency and financial health, highlighting areas that may require further attention and improvement to optimize the management of its working capital.


Peer comparison

Dec 31, 2023