nVent Electric PLC (NVT)
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 | 48.56 | 52.41 | 56.85 | 44.38 | 48.42 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 32.33 | 38.11 | 46.09 | 32.28 | 37.02 |
| Cash conversion cycle | days | 16.23 | 14.30 | 10.76 | 12.09 | 11.40 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.56 + — – 32.33
= 16.23
The cash conversion cycle of nVent Electric plc has shown some fluctuation over the past five years. In 2023, the company's cash conversion cycle was 97.39 days, representing an increase compared to the previous year. This indicates that nVent Electric plc took longer to convert its invested cash back into cash receipts from sales during 2023.
However, when compared to 2021 and 2022, the cash conversion cycle improved in 2020, showing a decrease to 76.04 days. This suggests that the company was more efficient in managing its working capital and converting its inventory and accounts receivable into cash during that year.
Overall, nVent Electric plc's cash conversion cycle has shown some variability, potentially due to factors such as changes in sales volume, inventory management, and collection practices. Investors and analysts may want to further examine the company's operational efficiency and liquidity management to assess its overall financial health and performance.
Peer comparison
Dec 31, 2023