Innovex International, Inc (INVX)

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	231.16	230.12	160.88	162.39	287.44
Days of sales outstanding (DSO)	days	147.12	101.88	98.62	102.34	256.54
Number of days of payables	days	55.58	40.03	49.03	67.45	50.61
Cash conversion cycle	days	322.70	291.97	210.47	197.27	493.37

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 231.16 + 147.12 – 55.58
= 322.70

The cash conversion cycle (CCC) of Innovex International, Inc. over the specified period exhibits significant fluctuations, indicating changes in the company’s operational efficiency and working capital management.

As of December 31, 2020, the CCC was approximately 493.37 days, reflecting a notably prolonged cycle. This lengthy duration suggests the company experienced considerable delays in converting its investments in inventory and receivables into cash, possibly due to extended inventory holding periods, slow collection processes, or both.

By December 31, 2021, the CCC markedly decreased to approximately 197.27 days, indicating a substantial improvement in operating efficiency. This sharp reduction implies enhancements in inventory turnover, receivables collection, or both, enabling the company to realize cash faster and generate a more efficient cash flow cycle.

However, the subsequent year, the CCC increased again to around 210.47 days by December 31, 2022. Although still significantly lower than the 2020 level, this uptick suggests some deterioration in operational efficiency or changes in credit or inventory policies that may have temporarily extended the cash conversion cycle.

From December 31, 2022, the CCC continued its upward trend, reaching approximately 291.97 days by December 31, 2023, and further extending to about 322.70 days by December 31, 2024. This incremental elongation over these two years indicates a deterioration in the company’s liquidity cycle, potentially due to slower receivables collection, increased inventory levels, or both. It could also reflect strategic shifts in credit terms or supply chain complexities affecting operational throughput.

Overall, the data demonstrates that Innovex International, Inc. experienced a substantial reduction in its cash conversion cycle during 2020–2021, followed by a gradual and continuous extension from 2022 onward. These trends highlight the importance of ongoing operational and credit management to optimize cash flow efficiency and liquidity positioning.