Enpro Industries (NPO)
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 | 49.65 | 50.21 | 45.07 | 44.91 | 47.80 |
| Days of sales outstanding (DSO) | days | — | — | 1.62 | 15.79 | 7.79 |
| Number of days of payables | days | 23.92 | 24.26 | 23.88 | 22.54 | 25.16 |
| Cash conversion cycle | days | 25.73 | 25.95 | 22.82 | 38.16 | 30.42 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 49.65 + — – 23.92
= 25.73
The cash conversion cycle for Enpro Inc has fluctuated over the past five years. It decreased from 82.54 days in 2019 to 84.89 days in 2020, before increasing to 97.00 days in 2021. However, there was a slight improvement in 2022 with a cycle of 87.92 days and a further reduction to 82.86 days in 2023.
A lower cash conversion cycle indicates that Enpro Inc is managing its working capital more efficiently, as it takes less time to convert inventory into cash. Conversely, a longer cycle suggests that the company takes longer to collect cash from its customers or has a longer inventory holding period, which may tie up capital and affect liquidity.
Overall, Enpro Inc should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and maximize operational efficiency.