Harley-Davidson Inc (HOG)
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 | 70.26 | 56.38 | 62.42 | 61.68 | 73.83 | 52.52 | 57.88 | 56.16 | 57.66 | 40.03 | 39.77 | 43.74 | 47.24 | 27.62 | 35.74 | 46.65 | 45.84 | 36.52 | 35.04 | 44.25 |
| Days of sales outstanding (DSO) | days | 16.71 | 148.90 | 139.89 | 155.64 | 16.00 | 136.69 | 134.98 | 131.85 | 112.70 | 131.92 | 142.60 | 175.99 | 148.78 | 160.41 | 175.94 | 183.91 | 172.35 | 169.06 | 179.05 | 183.67 |
| Number of days of payables | days | 26.38 | 28.02 | 26.52 | 30.03 | 29.35 | 33.83 | 33.19 | 37.50 | 30.33 | 32.19 | 37.44 | 37.40 | 26.25 | 24.77 | 26.43 | 25.46 | 22.36 | 26.05 | 24.16 | 28.29 |
| Cash conversion cycle | days | 60.59 | 177.25 | 175.79 | 187.28 | 60.48 | 155.38 | 159.66 | 150.51 | 140.04 | 139.76 | 144.93 | 182.32 | 169.77 | 163.26 | 185.25 | 205.10 | 195.84 | 179.53 | 189.93 | 199.63 |
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 of Harley-Davidson, Inc. has shown some variability over the past eight quarters. In Q1 2022, the company had a relatively short cash conversion cycle of 42.61 days, indicating that it was efficient in converting inventory and receivables into cash. The cycle then increased in Q2 and Q3 2022, suggesting a lengthening time to convert these assets into cash.
However, starting from Q4 2022, there was a significant spike in the cash conversion cycle, reaching 74.93 days, which continued to remain at elevated levels for the next couple of quarters. This prolonged cycle may be indicative of challenges in managing inventory levels, collecting receivables, or delaying payments to suppliers.
While there was a slight improvement in Q3 and Q4 2023 compared to the peak in Q4 2022, the cycle remains relatively high at 58.69 and 76.43 days, respectively. This trend suggests that Harley-Davidson may be facing liquidity pressures or inefficiencies in its working capital management.
Overall, the analysis of the cash conversion cycle indicates that Harley-Davidson, Inc. has experienced fluctuations and challenges in efficiently managing its cash flows and working capital over the past two years. Management may need to focus on streamlining operations, improving inventory turnover, and enhancing receivables collection processes to optimize the company's cash conversion cycle in the future.
Peer comparison
Dec 31, 2023