ESAB Corp (ESAB)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.51 | 81.52 | 89.08 | 96.42 | 90.24 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 86.51 | 81.52 | 89.08 | 96.42 | 90.24 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 86.51 + — – —
= 86.51
ESAB Corp's cash conversion cycle has shown some fluctuations over the years. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
Looking at the data provided, the company's cash conversion cycle was 90.24 days in December 2020, which increased to 96.42 days by December 2021. This indicates a lengthening in the time it takes for ESAB Corp to convert its resources into cash.
However, there was a slight improvement in efficiency by December 2022, as the cash conversion cycle decreased to 89.08 days. Subsequently, by December 2023, the cycle further improved to 81.52 days, showing a positive trend towards faster conversion of resources into cash.
In the latest period, by December 2024, the cash conversion cycle increased slightly to 86.51 days. Overall, ESAB Corp has managed to reduce its cash conversion cycle over the years, which signifies improved working capital management and a potentially better cash flow position. It is essential for the company to continue monitoring and optimizing this cycle to enhance efficiency and financial performance.
Peer comparison
Dec 31, 2024