Hubbell Inc (HUBB)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	65.85	68.88	62.51	64.59	51.23
Days of sales outstanding (DSO)	days	49.08	53.75	55.30	59.82	48.95
Number of days of payables	days	42.37	46.60	44.72	51.98	32.99
Cash conversion cycle	days	72.55	76.03	73.09	72.43	67.19

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.85 + 49.08 – 42.37
= 72.55

The cash conversion cycle of Hubbell Inc has shown a slight upward trend over the past five years. It increased from 67.19 days as of December 31, 2020, to 72.43 days as of December 31, 2021, and further to 73.09 days by December 31, 2022. However, there was a slight decrease to 72.55 days by December 31, 2024, after peaking at 76.03 days on December 31, 2023.

This indicates that the company may be taking longer to convert its investments in inventory into cash receipts from its sales and then recovering those cash outflows from paying its suppliers. The fluctuations in the cash conversion cycle may be attributed to changes in inventory management, sales terms, or payment practices. Hubbell Inc should continue to monitor and potentially optimize its cash conversion cycle to improve its working capital efficiency.