Honeywell International Inc (HON)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	98.96	100.25	101.39	102.23	100.10	95.56	92.55	89.15	84.84	84.95	86.97	85.50	80.16	77.36	74.72	75.26	73.91	76.25	74.86	69.73
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	98.96	100.25	101.39	102.23	100.10	95.56	92.55	89.15	84.84	84.95	86.97	85.50	80.16	77.36	74.72	75.26	73.91	76.25	74.86	69.73

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.96 + — – —
= 98.96

The cash conversion cycle of Honeywell International Inc has shown some fluctuations over the analyzed period. It measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, and then back into cash through collections from customers.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged between a low of 69.73 days and a high of 102.23 days. The trend indicates an increase in the duration of the cycle, reaching its peak at 102.23 days by the end of June 30, 2024. The company's management of inventory, accounts receivable, and accounts payable has thus become less efficient over time.

A longer cash conversion cycle may indicate inefficiencies in managing working capital, leading to increased financing costs and potential cash flow problems. It could also suggest slower inventory turnover, longer collection periods from customers, and delayed payment to suppliers.

Honeywell International Inc should assess factors contributing to the elongated cash conversion cycle, such as inventory management practices, sales terms, and payment terms with suppliers. By improving these key areas, the company can enhance its operational efficiency, strengthen its cash flow position, and potentially boost overall financial performance.