Fluor Corporation (FLR)
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 | — | 0.03 | 22.77 | 5.64 | — |
| Days of sales outstanding (DSO) | days | 26.82 | 29.45 | 23.24 | 27.32 | 25.40 |
| Number of days of payables | days | 29.55 | 27.72 | 32.50 | 26.48 | 36.05 |
| Cash conversion cycle | days | -2.73 | 1.75 | 13.51 | 6.48 | -10.66 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 26.82 – 29.55
= -2.73
The cash conversion cycle for Fluor Corporation has exhibited fluctuating trends over the past five years. In 2023, the company's cash conversion cycle improved significantly to -2.73 days, indicating that Fluor was able to convert its inventory and receivables into cash more efficiently compared to the previous year. The negative value implies that Fluor converted its resources into cash at a faster pace than paying its creditors.
The positive cash conversion cycle observed in 2022 at 1.73 days suggests that the company took longer to convert its investments in inventory and receivables into cash, which may have impacted its overall liquidity position during that period.
In 2021 and 2019, Fluor experienced negative cash conversion cycles of -6.90 days and -6.19 days, respectively. These values indicate that the company was able to efficiently manage its working capital, converting assets into cash quicker than paying off liabilities, which is a positive sign for cash flow management.
Overall, the analysis of Fluor Corporation's cash conversion cycle highlights fluctuations in the efficiency of its working capital management over the past five years, with improvements in certain years and challenges in others. Continued monitoring and optimization of the cash conversion cycle will be crucial for maintaining healthy liquidity and operational efficiency in the future.
Peer comparison
Dec 31, 2023