Novanta Inc (NOVT)
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 | 68.29 | 76.99 | 87.74 | 76.58 | 67.73 |
| Days of sales outstanding (DSO) | days | 58.04 | 57.84 | 58.47 | 59.85 | 46.58 |
| Number of days of payables | days | 36.31 | 29.48 | 39.29 | 41.75 | 31.38 |
| Cash conversion cycle | days | 90.02 | 105.35 | 106.93 | 94.68 | 82.93 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.29 + 58.04 – 36.31
= 90.02
Novanta Inc's cash conversion cycle has shown a fluctuating trend over the years. Starting at 82.93 days on December 31, 2020, the cycle increased to 94.68 days by December 31, 2021, indicating a slower conversion of inventory into cash. This trend continued as the cycle lengthened to 106.93 days by December 31, 2022, suggesting potential inefficiencies in managing working capital.
However, there was a slight improvement by December 31, 2023, with the cycle shortening to 105.35 days. Despite this improvement, the cash conversion cycle remained elevated compared to the initial levels. By December 31, 2024, the cycle further decreased to 90.02 days, showing a positive sign of better efficiency in converting inventory to cash.
Overall, Novanta Inc's cash conversion cycle reflects fluctuations over the years, with periods of improvement and challenges in managing working capital efficiently. Further analysis of the underlying factors influencing the cycle's dynamics could provide insights into the company's operational performance and liquidity management.
Peer comparison
Dec 31, 2024