Patrick Industries Inc (PATK)

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	62.87	60.58	60.62	60.53	57.73	61.02	62.12	64.18	62.52	54.46	50.40	51.52	51.45	50.67	51.05	49.45	45.37	61.73	57.59	60.73
Days of sales outstanding (DSO)	days	17.25	24.16	19.43	—	12.91	20.52	25.78	28.28	15.44	28.89	28.87	28.17	19.46	28.33	24.64	24.36	13.68	20.45	18.00	21.62
Number of days of payables	days	17.32	17.35	14.25	14.38	12.35	15.69	18.44	22.11	20.71	24.57	20.43	23.02	17.40	21.08	22.60	24.97	17.19	27.71	26.93	28.56
Cash conversion cycle	days	62.80	67.39	65.80	46.15	58.29	65.86	69.46	70.35	57.24	58.78	58.84	56.67	53.52	57.91	53.09	48.83	41.86	54.47	48.66	53.79

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.87 + 17.25 – 17.32
= 62.80

The cash conversion cycle of Patrick Industries, Inc. has exhibited some fluctuation over the past eight quarters, with values ranging from 63.98 days to 74.31 days. The trend shows a mix of increasing and decreasing cycles, indicating potential variations in the company's efficiency in managing its cash flow and working capital.

In Q4 2023, the cash conversion cycle was recorded at 68.45 days, slightly lower than the previous quarter. This suggests that the company was able to convert its investments in raw materials and inventory into sales and ultimately into cash more efficiently during this period. However, compared to Q4 2022 where the cycle was 63.98 days, there has been an increase in the time taken to complete a cycle.

Overall, it is essential for Patrick Industries to continually assess and improve its cash conversion cycle to enhance liquidity, optimize working capital management, and ensure timely payment of obligations. This analysis highlights the importance of closely monitoring and analyzing the company's financial metrics to drive strategic decision-making and operational efficiency.