NVR Inc (NVR)
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 | 19,021.53 | 16,786.83 | 19,569.67 | 17,224.35 | 117,085.92 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 19,021.53 | 16,786.83 | 19,569.67 | 17,224.35 | 117,085.92 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19,021.53 + — – —
= 19,021.53
The cash conversion cycle of NVR Inc. has varied over the past five years, indicating fluctuations in the company's efficiency in managing its working capital.
In 2023, the cash conversion cycle increased to 84.04 days from 69.99 days in 2022, suggesting that NVR Inc. took longer to convert its resources into cash during the year. This could indicate potential challenges in managing inventory, collecting receivables, or paying suppliers efficiently.
Comparing 2023 to 2021, NVR Inc.'s cash conversion cycle decreased from 87.69 days to 84.04 days, which implies a slight improvement in the company's working capital efficiency. However, the cycle remains relatively high, indicating that there may still be room for enhancing operational effectiveness in cash flow management.
Additionally, the cash conversion cycle in 2023 was higher than in 2019 when it was 68.55 days, suggesting a deterioration in the company's working capital management efficiency over this period. This trend highlights the importance for NVR Inc. to focus on optimizing inventory, accounts receivable, and accounts payable processes to shorten the cash conversion cycle and enhance liquidity.
Peer comparison
Dec 31, 2023