Polaris Industries Inc (PII)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 110.59 | 118.12 | 111.49 | 106.33 | 94.56 | 107.08 | 105.03 | 102.83 | 102.36 | 105.81 | 109.36 | 108.12 | 95.97 | 105.49 | 91.20 | 86.16 | 80.83 | 88.16 | 75.85 | 88.32 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 110.59 | 118.12 | 111.49 | 106.33 | 94.56 | 107.08 | 105.03 | 102.83 | 102.36 | 105.81 | 109.36 | 108.12 | 95.97 | 105.49 | 91.20 | 86.16 | 80.83 | 88.16 | 75.85 | 88.32 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 110.59 + — – —
= 110.59
The cash conversion cycle of Polaris Industries Inc has shown some fluctuations over the periods analyzed. In the first quarter of 2020, the company's cash conversion cycle was 88.32 days, indicating that it took approximately 88 days for Polaris to convert its investments in inventory and other resources into cash flows from sales.
Throughout the following quarters, the cash conversion cycle experienced some variations, with a downward trend observed until the third quarter of 2021 where it dipped to 105.49 days. However, the cycle then increased in the subsequent periods, reaching its peak at 118.12 days in the third quarter of 2024.
A longer cash conversion cycle suggests that Polaris is taking more time to generate cash from its operations, potentially indicating inefficiencies in managing its working capital. This can have implications for the company's liquidity and operational efficiency.
It is important for Polaris to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and maintain a healthy cash flow position. By analyzing trends in the cash conversion cycle, the company can identify areas for improvement in inventory management, accounts receivable collection, and accounts payable payment, ultimately enhancing its overall financial performance.