Norfolk Southern Corporation (NSC)
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 | 22.66 | 23.76 | 22.34 | 24.15 | 26.58 |
| Days of sales outstanding (DSO) | days | 32.19 | 36.61 | 34.76 | 33.94 | 33.78 |
| Number of days of payables | days | 139.42 | 147.44 | 114.19 | 149.66 | 122.19 |
| Cash conversion cycle | days | -84.57 | -87.06 | -57.08 | -91.57 | -61.83 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.66 + 32.19 – 139.42
= -84.57
The cash conversion cycle for Norfolk Southern Corporation has shown fluctuations over the years based on the provided data. As of December 31, 2020, the company had a cash conversion cycle of -61.83 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly.
By December 31, 2021, the cash conversion cycle had elongated to -91.57 days, suggesting a longer period for the company to convert its resources back into cash. This may reflect changes in the company's operational efficiency or inventory management practices during that year.
In the following year, by December 31, 2022, there was a significant improvement in the cash conversion cycle, decreasing to -57.08 days. This reduction indicates that Norfolk Southern Corporation was able to streamline its operations and enhance its cash flow management.
However, by December 31, 2023, the cash conversion cycle increased to -87.06 days, surpassing the efficiency seen in the previous year. This change could signal challenges in managing working capital effectively or delays in the conversion of assets into cash during that period.
By the end of December 31, 2024, the cash conversion cycle stood at -84.57 days, showing a slight improvement compared to the previous year but still below the level achieved in 2022. Overall, the trend in the cash conversion cycle for Norfolk Southern Corporation highlights the variability in the company's ability to convert its operating cycle into cash efficiently over the analyzed years.
Peer comparison
Dec 31, 2024