Flowserve Corporation (FLS)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 79.56 | 85.70 | 89.55 | 90.33 | 85.03 | 84.90 | 82.53 | 79.46 | 74.80 | 75.77 | 74.21 | 70.93 | 69.11 | 72.66 | 68.76 | 68.74 | 68.05 | 71.96 | 71.31 | 70.46 |
| Days of sales outstanding (DSO) | days | 76.60 | 76.52 | 82.52 | 88.40 | 90.46 | 81.28 | 77.91 | 76.99 | 80.38 | 73.45 | 74.15 | 73.69 | 75.38 | 73.05 | 72.44 | 68.74 | 73.98 | 74.97 | 77.67 | 75.60 |
| Number of days of payables | days | 49.53 | 45.03 | 48.25 | 50.04 | 50.47 | 45.13 | 47.77 | 46.06 | 45.22 | 40.27 | 42.32 | 40.76 | 45.59 | 43.61 | 43.09 | 42.79 | 46.09 | 41.70 | 42.11 | 41.24 |
| Cash conversion cycle | days | 106.63 | 117.19 | 123.82 | 128.68 | 125.02 | 121.05 | 112.67 | 110.39 | 109.96 | 108.95 | 106.04 | 103.86 | 98.90 | 102.10 | 98.11 | 94.70 | 95.94 | 105.23 | 106.87 | 104.83 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.56 + 76.60 – 49.53
= 106.63
The cash conversion cycle of Flowserve Corp. has displayed fluctuations over the past eight quarters. In Q1 2022, the company achieved the lowest cash conversion cycle of 120.44 days, indicating a relatively efficient operational cycle. However, this efficiency deteriorated in subsequent quarters, reaching a peak of 140.77 days in Q1 2023.
While some improvement was observed in Q2 and Q3 2023, with the cash conversion cycle decreasing to 136.19 days and 129.19 days respectively, Q4 2023 saw a slight increase to 114.33 days. This fluctuation suggests potential challenges in managing the company's cash flow and working capital efficiency.
It is essential for Flowserve Corp. to closely monitor and evaluate its cash conversion cycle to optimize working capital management. By identifying and addressing inefficiencies, the company can enhance its liquidity position and overall financial performance.
Peer comparison
Dec 31, 2023