Polaris Industries Inc (PII)
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 | 111.35 | 47.37 | 104.39 | 95.97 | 80.83 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 111.35 | 47.37 | 104.39 | 95.97 | 80.83 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 111.35 + — – —
= 111.35
The cash conversion cycle of Polaris Industries Inc has shown fluctuations over the years. In 2020, the company's cash conversion cycle was 80.83 days, indicating that it took approximately 80 days to convert its investments in raw materials into cash from sales. This increased to 95.97 days in 2021, reflecting a potential delay in converting inventory into cash. The metric further extended to 104.39 days in 2022, suggesting a longer period between paying suppliers and receiving cash from customers.
However, the company's cash conversion cycle improved significantly in 2023, decreasing to 47.37 days. This implies that Polaris Industries Inc streamlined its inventory management and collection processes, leading to a faster conversion of investments into cash. Nonetheless, in 2024, the cash conversion cycle increased to 111.35 days, indicating a potential slowdown in the company's cash conversion efficiency.
Overall, fluctuations in Polaris Industries Inc's cash conversion cycle suggest varying efficiencies in managing inventory, accounts receivable, and accounts payable, impacting the company's cash flow dynamics over the years. Monitoring and optimizing the cash conversion cycle can help the company maintain liquidity and improve overall financial performance.