PHINIA Inc. (PHIN)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.22 | 59.69 | 61.61 |
| Days of sales outstanding (DSO) | days | 86.56 | 96.11 | 105.42 |
| Number of days of payables | days | 62.57 | 72.21 | 77.11 |
| Cash conversion cycle | days | 77.21 | 83.58 | 89.92 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.22 + 86.56 – 62.57
= 77.21
The cash conversion cycle of PHINIA Inc. reflects a positive trend over the year 2024, showcasing an improvement in efficiency. As of March 31, 2024, the company's cash conversion cycle stood at 89.92 days, indicating that it took nearly 90 days to convert its investments in inventory and other resources into cash inflows. Subsequently, by September 30, 2024, the cycle decreased to 83.58 days, demonstrating a quicker conversion process.
Moreover, as of December 31, 2024, the cash conversion cycle further improved to 77.21 days, reflecting the company's ability to manage its working capital more effectively. A declining trend in the cash conversion cycle is generally seen as a positive sign, as it indicates that the company is efficiently managing its operations and turning its investments into cash at a faster pace. PHINIA Inc.'s decreasing cash conversion cycle throughout 2024 suggests an enhancement in operational efficiency and effective working capital management.
Peer comparison
Dec 31, 2024