NVR Inc (NVR)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 12,702.63 | 34,583.70 | 24,143.97 | 23,039.15 | 22,920.23 | 27,528.47 | 31,888.94 | 30,122.22 | 27,300.28 | 18,616.33 | 19,901.09 | 18,521.17 | 17,224.35 | 174,218.83 | 126,279.60 | 114,845.05 | 117,085.92 | 18,621.45 | 11,604.30 | 8,635.61 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 12,702.63 | 34,583.70 | 24,143.97 | 23,039.15 | 22,920.23 | 27,528.47 | 31,888.94 | 30,122.22 | 27,300.28 | 18,616.33 | 19,901.09 | 18,521.17 | 17,224.35 | 174,218.83 | 126,279.60 | 114,845.05 | 117,085.92 | 18,621.45 | 11,604.30 | 8,635.61 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 12,702.63 + — – —
= 12,702.63
The cash conversion cycle of NVR Inc. has been fluctuating over the past eight quarters, ranging from a low of 69.99 days in Q4 2022 to a high of 102.76 days in Q2 2022. In Q4 2023, the cash conversion cycle was 84.04 days, reflecting the time it takes for the company to convert its investments in inventory and other resources into cash from sales.
A lower cash conversion cycle indicates that NVR Inc. is able to efficiently manage its working capital, turning inventory into sales and then into cash relatively quickly. On the other hand, a higher cash conversion cycle suggests that the company may be facing challenges in managing its working capital effectively, potentially due to issues such as slow inventory turnover or longer accounts receivable collection periods.
Overall, NVR Inc. should continue monitoring its cash conversion cycle to ensure that it remains at an optimal level, balancing the need to maintain adequate inventory levels with the goal of maximizing cash flow and liquidity.
Peer comparison
Dec 31, 2023