Huntington Ingalls Industries Inc (HII)
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 | 59.03 | 62.78 | 59.72 | 51.39 | 57.45 |
| Days of sales outstanding (DSO) | days | 20.52 | 27.56 | 24.60 | 22.15 | 19.11 |
| Number of days of payables | days | 175.83 | 220.23 | 223.67 | 172.56 | 209.96 |
| Cash conversion cycle | days | -96.28 | -129.90 | -139.35 | -99.02 | -133.39 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.03 + 20.52 – 175.83
= -96.28
The cash conversion cycle (CCC) of Huntington Ingalls Industries Inc has fluctuated over the past five years. In 2023, the CCC was 6.83 days, indicating that on average, it takes the company 6.83 days to convert its investments in raw materials into cash from sales. This represents an improvement from the previous year when the CCC was 9.42 days.
Comparing the latest CCC to previous years, it is evident that the company has managed its working capital more efficiently in 2023 compared to 2022. The 2023 CCC is also higher than that of 2021 when it stood at 4.82 days, suggesting that the company may have experienced some challenges in managing its working capital cycle more effectively in 2023.
Furthermore, the CCC in 2023 is slightly higher than in 2020, which was 6.82 days, indicating a marginal increase in the time taken to convert inputs into cash. The significant improvement in CCC in 2021 compared to 2020 suggests that the company may have implemented more effective working capital management strategies during that period.
In 2019, Huntington Ingalls Industries Inc achieved the lowest CCC of 1.23 days. This exceptionally low figure indicates that the company was able to convert its investments in inventory and receivables into cash quickly. Overall, the fluctuation in the company's CCC over the years highlights the importance of effective working capital management in ensuring operational efficiency and financial performance.
Peer comparison
Dec 31, 2023