Installed Building Products Inc (IBP)
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 | 24.55 | 24.31 | 24.66 | 25.83 | 27.40 | 29.75 | 34.00 | 30.50 | 29.12 | 25.10 | 22.19 | 20.22 | 18.65 | 17.45 | 17.37 | 18.60 | 19.41 | 17.03 | 17.61 | 17.18 |
| Days of sales outstanding (DSO) | days | 108.52 | 105.77 | 103.55 | 107.49 | 109.16 | 113.93 | 115.27 | 117.75 | 117.91 | 125.80 | 126.04 | 120.29 | 118.47 | 108.05 | 100.87 | 101.24 | 101.91 | 108.05 | 100.36 | 99.47 |
| Number of days of payables | days | 23.92 | 21.86 | 20.84 | 20.47 | 23.15 | 25.49 | 27.45 | 28.72 | 27.02 | 25.42 | 24.13 | 24.46 | 24.51 | 21.59 | 20.44 | 22.93 | 25.73 | 26.85 | 26.50 | 25.18 |
| Cash conversion cycle | days | 109.15 | 108.23 | 107.38 | 112.84 | 113.41 | 118.18 | 121.83 | 119.54 | 120.01 | 125.48 | 124.10 | 116.06 | 112.61 | 103.91 | 97.80 | 96.91 | 95.59 | 98.24 | 91.47 | 91.48 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.55 + 108.52 – 23.92
= 109.15
The cash conversion cycle for Installed Building Products Inc has fluctuated over the past eight quarters, ranging from a low of 56.43 days in Q4 2023 to a high of 69.27 days in Q3 2022. The cycle measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales.
A decreasing trend in the cash conversion cycle indicates improved efficiency in managing working capital and converting assets into cash, which is generally positive for the company's liquidity and financial health. Conversely, an increasing trend may suggest inefficiencies in managing inventory or collecting receivables, potentially leading to liquidity challenges.
It is noteworthy that the cash conversion cycle has varied within a relatively narrow range over the observed period, indicating some stability in the company's working capital management practices. However, there is room for further analysis to identify specific factors influencing these fluctuations and potential areas for improvement to optimize the cash conversion cycle.
Peer comparison
Dec 31, 2023