Hayward Holdings Inc (HAYW)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 97.44 | 101.81 | 79.31 |
| Days of sales outstanding (DSO) | days | 111.69 | 68.63 | 56.80 |
| Number of days of payables | days | 31.22 | 19.39 | 29.71 |
| Cash conversion cycle | days | 177.91 | 151.05 | 106.40 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 97.44 + 111.69 – 31.22
= 177.91
Hayward Holdings Inc's cash conversion cycle has shown an increasing trend over the past three years. The company's cash conversion cycle was 206.84 days at the end of 2023, compared to 182.51 days in 2022 and 125.62 days in 2021. This indicates that the company is taking longer to convert its investments in inventory into cash receipts from sales.
A longer cash conversion cycle may suggest inefficiencies in managing working capital, such as slower inventory turnover or longer accounts receivable collection periods. It could also imply that the company is facing challenges in converting its sales into cash quickly, which may impact its liquidity and cash flow.
Hayward Holdings Inc should review its inventory management practices, credit policies, and collection procedures to identify areas for improvement in order to shorten its cash conversion cycle and enhance its cash flow efficiency. It may benefit from streamlining processes, negotiating better payment terms with suppliers, and improving inventory turnover to optimize working capital management.
Peer comparison
Dec 31, 2023