PACCAR Inc (PCAR)
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 | 959.69 | 957.71 | 762.01 | 401.65 | 377.54 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 959.69 | 957.71 | 762.01 | 401.65 | 377.54 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 959.69 + — – —
= 959.69
The cash conversion cycle of Paccar Inc. has shown some fluctuations over the past five years. In 2023, the cash conversion cycle increased to 217.75 days compared to 207.35 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year. However, it is worth noting that the cash conversion cycle in 2023 is still lower than the peak seen in 2020 when it reached 254.82 days.
In 2021, the cash conversion cycle was relatively stable at 216.58 days, showing consistency in managing its working capital. The most efficient performance was observed in 2019 when the cash conversion cycle was at its lowest at 191.61 days, indicating a faster conversion of investments into cash.
Overall, the trend in the cash conversion cycle suggests that Paccar Inc. has experienced some variability in managing its cash flow from operations over the past five years. This metric is essential in evaluating the company's efficiency in managing working capital and converting its assets into cash. Further analysis of the underlying factors driving these fluctuations would provide valuable insights into the company's operational effectiveness.
Peer comparison
Dec 31, 2023