FTI Consulting Inc (FCN)
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 | 7.93 | — | 11.43 | 12.77 | 11.39 |
| Days of sales outstanding (DSO) | days | 164.20 | 153.11 | 140.75 | 152.52 | 184.62 |
| Number of days of payables | days | 3.37 | 3.58 | 3.08 | 2.86 | 4.36 |
| Cash conversion cycle | days | 168.76 | 149.53 | 149.10 | 162.42 | 191.65 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.93 + 164.20 – 3.37
= 168.76
The cash conversion cycle of FTI Consulting Inc. has shown fluctuations over the past five years. The cycle measures how long it takes for a company to convert its investments in inventory into cash flows from sales. In 2023, the cash conversion cycle increased to 116.74 days compared to 109.02 days in 2022, indicating that it took longer for the company to convert its investments in inventory into cash during that year.
In 2021, the cash conversion cycle improved to 100.99 days, showing a positive trend as the company was able to convert its investments into cash more efficiently compared to the previous years. However, in 2020 and 2019, the cycle was relatively stable at 109.38 days and 109.92 days, respectively.
Overall, FTI Consulting Inc. should aim to maintain a low cash conversion cycle, as it signifies efficient management of working capital and liquidity. Monitoring and managing this metric can help the company optimize its operations and improve its financial performance.
Peer comparison
Dec 31, 2023