Comfort Systems USA Inc (FIX)
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 | 5.67 | 3.79 | 3.18 | 2.13 | 1.74 |
| Days of sales outstanding (DSO) | days | 10.79 | 425.66 | 447.92 | 400.94 | 355.79 |
| Number of days of payables | days | 36.36 | 36.23 | 37.04 | 32.26 | 33.89 |
| Cash conversion cycle | days | -19.90 | 393.22 | 414.05 | 370.81 | 323.64 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.67 + 10.79 – 36.36
= -19.90
The cash conversion cycle (CCC) of Comfort Systems USA, Inc. has shown fluctuations over the past five years. In 2023, the CCC increased to 80.51 days from 70.41 days in 2022. This indicates that the company took longer to convert its investments in raw materials into cash from sales.
Comparing this to 2021, where the CCC was 75.74 days, the current cycle reflects an increase in the number of days it takes for Comfort Systems USA to realize cash from its operations. The CCC was at its lowest in 2020, at 62.88 days, showing an improvement in the efficiency of the company's working capital management.
However, in 2019, the CCC was slightly higher at 67.63 days compared to 2022 and 2021. This implies that, over the years, Comfort Systems USA has experienced fluctuations in its cash conversion cycle, which might be influenced by factors like inventory management, sales collection period, and payment periods to suppliers.
Overall, the company should focus on optimizing its CCC to ensure timely conversions of investments into cash to improve its financial performance and liquidity position.
Peer comparison
Dec 31, 2023