nVent Electric PLC (NVT)
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 | 73.18 | 83.83 | 69.83 | 77.29 | 68.72 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 73.18 | 83.83 | 69.83 | 77.29 | 68.72 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.18 + — – —
= 73.18
nVent Electric PLC's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash inflows. From the data provided, we observe fluctuations in the cash conversion cycle over the years:
1. In December 2020, the cash conversion cycle stood at 68.72 days, indicating that nVent Electric managed its working capital efficiently by quickly turning its inventory and receivables into cash.
2. By December 2021, the cash conversion cycle increased to 77.29 days, suggesting a slight slowdown in the conversion of resources into cash.
3. The cycle decreased to 69.83 days by December 2022, indicating an improvement in working capital management efficiency compared to the previous year.
4. In December 2023, the cash conversion cycle saw a significant increase to 83.83 days, signifying a potential delay in converting investments into cash flows.
5. By December 2024, the cycle decreased to 73.18 days, showing a partial recovery in cash conversion efficiency compared to the previous year.
Overall, fluctuations in the cash conversion cycle of nVent Electric PLC suggest varying levels of efficiency in managing working capital and the company's ability to generate cash flows from its operational activities. Monitoring and managing the cash conversion cycle is crucial for ensuring optimal utilization of resources and maintaining liquidity in the business operations.
Peer comparison
Dec 31, 2024