Itron Inc (ITRI)
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 | 50.39 | 56.42 | 51.70 | 33.63 | 34.49 |
| Days of sales outstanding (DSO) | days | 52.40 | 51.16 | 57.24 | 57.89 | 65.14 |
| Number of days of payables | days | 26.97 | 39.68 | 53.62 | 39.18 | 40.78 |
| Cash conversion cycle | days | 75.81 | 67.90 | 55.32 | 52.34 | 58.85 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.39 + 52.40 – 26.97
= 75.81
Based on the data provided for Itron Inc's cash conversion cycle over the past five years, we observe fluctuations in the efficiency of the company's working capital management.
In 2020, the cash conversion cycle stood at 58.85 days, indicating that it took the company approximately 58.85 days to convert its investments in inventory and accounts receivable into cash. Subsequently, in 2021, the cycle decreased to 52.34 days, signifying an improvement in the company's ability to manage its working capital more efficiently.
However, from 2022 to 2024, there was a slight increase in the cash conversion cycle, starting at 55.32 days in 2022, peaking at 75.81 days in 2024. This trend suggests a potential delay in converting investments into cash, possibly due to prolonged payment periods from customers or higher inventory levels.
Overall, the fluctuations in Itron Inc's cash conversion cycle indicate varying levels of operational efficiency and effectiveness in managing working capital over the years. It is crucial for the company to focus on optimizing its cash conversion cycle to ensure a healthy cash flow position and enhance overall financial performance.
Peer comparison
Dec 31, 2024