Mohawk Industries Inc (MHK)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.42 | 87.84 | 87.97 | 76.93 | 89.33 |
| Days of sales outstanding (DSO) | days | 61.96 | 59.57 | 60.32 | 65.77 | 56.08 |
| Number of days of payables | days | 32.71 | 34.40 | 45.19 | 40.89 | 32.29 |
| Cash conversion cycle | days | 109.66 | 113.01 | 103.10 | 101.81 | 113.12 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.42 + 61.96 – 32.71
= 109.66
The trend in Mohawk Industries, Inc.'s cash conversion cycle over the past five years can provide insight into its efficiency in managing its cash flow related to its operations.
The company's cash conversion cycle increased from 111.25 days in 2020 to 129.79 days in 2022 before slightly improving to 127.03 days in 2023. This increase indicates that the company took longer to convert its investments in inventory and accounts receivable into cash in 2022. However, there was a modest improvement in the efficiency of the cash conversion cycle in 2023, although it remains higher than the 2020 level.
Overall, Mohawk Industries, Inc. should continue to focus on optimizing its cash conversion cycle to improve its cash flow management, reduce working capital requirements, and enhance its overall financial performance in the future.
Peer comparison
Dec 31, 2023