Harley-Davidson Inc (HOG)
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 | 70.26 | 73.83 | 57.66 | 47.24 | 45.84 |
| Days of sales outstanding (DSO) | days | 16.71 | 16.00 | 112.70 | 148.78 | 172.35 |
| Number of days of payables | days | 26.38 | 29.35 | 30.33 | 26.25 | 22.36 |
| Cash conversion cycle | days | 60.59 | 60.48 | 140.04 | 169.77 | 195.84 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.26 + 16.71 – 26.38
= 60.59
The cash conversion cycle for Harley-Davidson, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 76.43 days from 74.93 days in 2022. This indicates that it took Harley-Davidson, Inc. an average of 76.43 days to convert its investments in inventory and other resources into cash in 2023.
Comparing this to 2021 and 2020, where the cash conversion cycle was 50.20 days and 45.31 days respectively, we see a significant increase in the time taken to convert investments into cash. However, in 2019, the cash conversion cycle was higher at 51.20 days, indicating some variability year over year.
A longer cash conversion cycle suggests that Harley-Davidson, Inc. may be facing challenges in efficiently managing its working capital, which could lead to liquidity issues and decreased overall financial performance. It is important for the company to analyze the reasons behind the increase in the cash conversion cycle and implement strategies to streamline operations and improve cash flow management in order to enhance its financial stability.
Peer comparison
Dec 31, 2023