ITT Inc (ITT)

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 90.54 96.53 94.35 84.31 77.60
Days of sales outstanding (DSO) days 70.67 75.07 76.82 73.28 74.76
Number of days of payables days 70.20 73.31 70.88 73.06 66.04
Cash conversion cycle days 91.01 98.29 100.29 84.53 86.32

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 90.54 + 70.67 – 70.20
= 91.01

The cash conversion cycle of ITT Inc has displayed fluctuating trends over the past five years. Starting at 86.32 days on December 31, 2020, it decreased to 84.53 days by December 31, 2021. However, the cycle increased significantly to 100.29 days by December 31, 2022, and reduced slightly to 98.29 days by December 31, 2023. It then improved to 91.01 days by December 31, 2024.

Overall, ITT Inc's cash conversion cycle has shown some volatility, indicating potential challenges in managing the company's working capital efficiently. A lower cash conversion cycle suggests the company is able to collect cash from sales more quickly, while a higher cycle may indicate inefficiencies in inventory management or collection of receivables. Further analysis is recommended to understand the underlying factors driving these fluctuations and to optimize the cash conversion cycle for better liquidity management.