Franklin Electric Co Inc (FELE)
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 | 102.03 | 110.28 | 110.45 | 97.53 | 91.57 |
| Days of sales outstanding (DSO) | days | 39.77 | 41.53 | 43.28 | 47.00 | 48.49 |
| Number of days of payables | days | 30.57 | 28.18 | 40.44 | 31.08 | 25.19 |
| Cash conversion cycle | days | 111.23 | 123.63 | 113.29 | 113.45 | 114.87 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.03 + 39.77 – 30.57
= 111.23
The cash conversion cycle of Franklin Electric Co., Inc. has shown fluctuation over the past five years. In 2023, the cash conversion cycle decreased to 134.36 days from 150.66 days in 2022, indicating an improvement in efficiency in managing its working capital. However, the cycle was still longer compared to 2021 when it was 138.97 days.
The company's cash conversion cycle in 2020 and 2019 was relatively stable, with values of 138.68 days and 137.74 days, respectively. This consistency suggests a certain level of effectiveness in managing the company's cash flow and its operating cycle during those years.
Analyzing the trend over the five-year period, it seems that Franklin Electric Co., Inc. has made improvements in its working capital management, as evidenced by the reduction in the cash conversion cycle in 2023 compared to the previous year. A shorter cash conversion cycle implies that the company is collecting cash from its operations more quickly, which can be a positive indicator of efficiency and liquidity management.
Peer comparison
Dec 31, 2023