Flowserve Corporation (FLS)
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 | 79.46 | 84.86 | 74.64 | 69.00 | 67.92 |
| Days of sales outstanding (DSO) | days | 76.44 | 89.68 | 81.66 | 75.69 | 74.27 |
| Number of days of payables | days | 49.47 | 50.37 | 45.13 | 45.52 | 46.00 |
| Cash conversion cycle | days | 106.43 | 124.17 | 111.18 | 99.17 | 96.19 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.46 + 76.44 – 49.47
= 106.43
Flowserve Corp.'s cash conversion cycle has shown fluctuations over the past five years. In 2023, the cycle decreased to 114.33 days from 133.17 days in 2022, indicating an improvement in efficiently converting its investments in inventory and accounts receivable into cash. However, this improvement was not sustained, as the cycle was higher in 2023 compared to 2021.
The company's cash conversion cycle was highest in 2022 at 133.17 days, reflecting a longer period for the company to convert its investments into cash. The company managed to reduce this cycle in 2023, but it remains higher than the levels seen in 2020 and 2019.
The overall trend suggests that Flowserve Corp. has room for further optimization in managing its inventory and accounts receivable turnover to enhance its cash conversion efficiency in the coming years.
Peer comparison
Dec 31, 2023