Ingersoll Rand Inc (IR)
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 | 94.73 | 105.50 | 106.50 | 97.13 | 91.49 | 100.75 | 104.04 | 109.42 | 104.23 | 104.67 | 108.77 | 105.70 | 98.54 | 104.72 | 100.92 | 107.29 | 99.07 | 187.16 | 226.05 | 297.45 |
Days of sales outstanding (DSO) | days | 67.37 | 68.44 | 67.51 | 65.71 | 65.51 | 66.46 | 68.97 | 73.11 | 69.22 | 65.97 | 67.34 | 69.04 | 67.20 | 68.33 | 72.07 | 79.58 | 86.90 | 113.23 | 134.80 | 178.53 |
Number of days of payables | days | 75.75 | 67.50 | 68.72 | 64.09 | 73.22 | 61.70 | 63.22 | 71.24 | 79.16 | 72.25 | 75.22 | 77.64 | 77.35 | 76.75 | 83.69 | 86.89 | 74.14 | 116.06 | 150.53 | 209.02 |
Cash conversion cycle | days | 86.35 | 106.44 | 105.29 | 98.75 | 83.78 | 105.52 | 109.79 | 111.29 | 94.30 | 98.39 | 100.89 | 97.11 | 88.39 | 96.30 | 89.29 | 99.99 | 111.82 | 184.33 | 210.32 | 266.96 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 94.73 + 67.37 – 75.75
= 86.35
The cash conversion cycle is a critical financial metric that reflects how efficiently a company manages its cash flow related to inventory, accounts receivable, and accounts payable. For Ingersoll Rand Inc, the cash conversion cycle has shown some fluctuations over the reported periods.
From March 31, 2020, to December 31, 2024, Ingersoll Rand Inc's cash conversion cycle has generally improved, decreasing from 266.96 days to 86.35 days. A lower cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory into cash, collect receivables promptly, and manage its payables effectively.
The trend of decreasing cash conversion cycle indicates that Ingersoll Rand Inc is improving its working capital management and cash flow efficiency. However, it is essential to keep monitoring this metric to ensure continued operational efficiency and financial health.
Overall, the decreasing trend in Ingersoll Rand Inc's cash conversion cycle reflects positively on its ability to manage its working capital effectively and generate cash flow from its core operations. It suggests that the company is becoming more efficient in converting its resources into cash, which is a key indicator of financial stability and performance.
Peer comparison
Dec 31, 2024