Garmin Ltd (GRMN)

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	159.05	193.35	160.72	120.40	132.87
Days of sales outstanding (DSO)	days	56.63	49.42	62.35	73.98	68.96
Number of days of payables	days	29.99	27.11	48.45	40.90	42.50
Cash conversion cycle	days	185.69	215.66	174.63	153.48	159.33

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 159.05 + 56.63 – 29.99
= 185.69

The cash conversion cycle of Garmin Ltd has shown fluctuations over the past five years. In 2023, the cash conversion cycle decreased to 185.69 days from 215.66 days in 2022, indicating that the company improved its efficiency in managing its cash flow during that period.

Comparing to 2021, the cash conversion cycle increased to 215.66 days in 2022. This suggests that in 2022, Garmin Ltd took longer to convert its investments in inventory and accounts receivables into cash.

However, looking back at 2021, the company managed to reduce the cash conversion cycle to 174.63 days from 153.48 days in 2020, showing improved efficiency in its cash management practices.

In 2020, there was a slight increase in the cash conversion cycle compared to 2019, where it was at 159.33 days. This implies that Garmin Ltd took a bit longer to convert its resources into cash in 2020.

Overall, the trend in the cash conversion cycle suggests that Garmin Ltd has experienced fluctuations in efficiency in managing its cash flow over the past five years, with some improvements and some declines in different periods.