Exponent Inc (EXPO)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 113.80 | 120.97 | 109.48 | 101.83 | 105.11 |
| Number of days of payables | days | 4.64 | 10.69 | 3.89 | 4.44 | 6.06 |
| Cash conversion cycle | days | 109.17 | 110.27 | 105.60 | 97.39 | 99.04 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 113.80 – 4.64
= 109.17
The cash conversion cycle for Exponent Inc has varied over the past five years, ranging from 97.39 days in 2020 to 110.27 days in 2022. In general, a higher number of days indicates that the company is taking longer to convert its investments in inventory and other resources into cash inflows from sales.
The increasing trend in the cash conversion cycle from 2019 to 2022 suggests a potential inefficiency in managing working capital, as the company may be delaying the collection of receivables, holding excessive levels of inventory, or taking longer to pay its suppliers.
However, in 2023, there was a slight improvement in the cash conversion cycle, reducing to 109.17 days. This could indicate that the company has made some adjustments to its working capital management practices to streamline operations and improve efficiency.
Overall, Exponent Inc should continue to monitor and analyze its cash conversion cycle to ensure optimal management of working capital and efficient utilization of resources to support its financial performance and growth objectives.
Peer comparison
Dec 31, 2023