Novanta Inc (NOVT)
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 | 70.00 | 76.58 | 82.02 | 84.01 | 79.19 | 81.25 | 85.27 | 87.61 | 89.80 | 87.43 | 86.63 | 82.90 | 78.25 | 81.21 | 67.69 | 66.47 | 69.42 | 73.62 | 76.07 | 78.05 |
| Days of sales outstanding (DSO) | days | 58.05 | 65.22 | 58.98 | 61.80 | 57.84 | 59.05 | 59.51 | 59.06 | 58.47 | 62.67 | — | — | 59.85 | — | — | — | 46.58 | — | — | — |
| Number of days of payables | days | 37.22 | 34.17 | 36.41 | 37.17 | 30.32 | 33.80 | 33.84 | 34.70 | 40.21 | 42.73 | 43.54 | 42.91 | 42.67 | 44.21 | 38.53 | 38.39 | 32.16 | 29.60 | 32.89 | 33.74 |
| Cash conversion cycle | days | 90.83 | 107.63 | 104.59 | 108.64 | 106.70 | 106.50 | 110.94 | 111.97 | 108.06 | 107.36 | 43.08 | 39.99 | 95.44 | 37.00 | 29.17 | 28.08 | 83.84 | 44.02 | 43.18 | 44.31 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.00 + 58.05 – 37.22
= 90.83
The cash conversion cycle is a measure of how quickly a company can convert its investments in inventory into cash flows from sales. Novanta Inc's cash conversion cycle has been fluctuating over the years.
In March 2020, the cash conversion cycle was 44.31 days, and it improved slightly to 43.18 days by June 2020. However, there was a slight increase to 44.02 days by September 2020. The cycle then experienced a significant increase to 83.84 days by December 2020, indicating a potential inefficiency in managing inventory, receivables, and payables.
There was a notable improvement in the cash conversion cycle to 28.08 days by March 2021 and 29.17 days by June 2021, suggesting the company may have implemented more efficient working capital management practices. However, the cycle increased to 37.00 days by September 2021 and continued to rise to 95.44 days by December 2021.
The trend continued with fluctuations as the cycle decreased to 39.99 days by March 2022 and increased to 43.08 days by June 2022, showcasing some instability in working capital management. Subsequently, there were significant increases to 107.36 days by September 2022 and 108.06 days by December 2022, indicating potential challenges in efficiently managing cash flows.
The cycle remained elevated, hovering around 110 days for the following quarters of March 2023, June 2023, and September 2023. However, there was a slight decrease to 106.70 days by December 2023.
The most recent data shows a moderate increase in the cash conversion cycle to 108.64 days by March 2024 and a slight decrease to 104.59 days by June 2024. By September 2024, the cycle increased to 107.63 days, and then decreased to 90.83 days by December 2024.
Overall, Novanta Inc's cash conversion cycle has displayed fluctuations over the years, indicating changes in the company's efficiency in managing working capital. Further analysis and monitoring of this metric could provide insights into the company's operational performance and working capital management strategies.
Peer comparison
Dec 31, 2024