Pentair PLC (PNR)
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 | 83.46 | 87.39 | 86.43 | 89.41 | 89.11 | 88.95 | 91.90 | 94.74 | 94.96 | 98.29 | 89.98 | 88.23 | 79.09 | 75.23 | 72.44 | 71.10 | 72.63 | 76.02 | 77.55 | 74.96 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 37.27 | 38.75 | 39.38 | 40.90 | 36.67 | 35.71 | 40.19 | 40.10 | 42.67 | 46.96 | 48.23 | 53.35 | 54.19 | 51.07 | 49.29 | 49.23 | 42.39 | 52.35 | 50.07 | 51.23 |
| Cash conversion cycle | days | 46.19 | 48.64 | 47.05 | 48.51 | 52.44 | 53.24 | 51.71 | 54.64 | 52.29 | 51.34 | 41.76 | 34.88 | 24.90 | 24.17 | 23.15 | 21.87 | 30.25 | 23.67 | 27.48 | 23.72 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 83.46 + — – 37.27
= 46.19
The cash conversion cycle of Pentair PLC has exhibited some fluctuations over the periods analyzed. From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 21.87 days to a high of 54.64 days.
In general, a shorter cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory into cash receipts. Conversely, a longer cash conversion cycle may suggest inefficiencies in inventory management and collection of receivables.
Analyzing the trend, it appears that the cash conversion cycle initially decreased from March 31, 2020, to March 31, 2021, indicating improved efficiency in managing working capital. However, from June 30, 2021, to December 31, 2024, the cash conversion cycle showed an increasing trend, reaching its peak at 54.64 days on March 31, 2023, before slightly decreasing in subsequent periods.
This increasing trend may signal potential challenges in managing working capital, such as slower inventory turnover or delayed collections from customers. It would be important for Pentair PLC to closely monitor and address the factors contributing to the longer cash conversion cycle to optimize its cash flow and overall financial performance.
Peer comparison
Dec 31, 2024