Pentair PLC (PNR)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 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 | 72.28 | 75.09 | 75.96 | 81.40 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 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 | 62.27 | 48.75 | 50.11 | 51.20 |
| Cash conversion cycle | days | 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 | 10.02 | 26.34 | 25.85 | 30.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.11 + — – 36.67
= 52.44
The cash conversion cycle of Pentair plc has shown some fluctuations over the past eight quarters. In Q1 2023, the company experienced a higher cash conversion cycle of 128.03 days, indicating a longer time taken to convert its investments in raw materials into cash from sales. This was preceded by a slight improvement in Q4 2022 with a cycle of 108.94 days.
Q2 2022 had the lowest cash conversion cycle of 92.80 days, reflecting a more efficient management of working capital, while Q3 2022 and Q3 2023 also showed relatively lower cycles compared to other quarters. This suggests that Pentair plc was able to effectively manage its inventory, accounts receivable, and accounts payable during these periods.
Overall, the trend in the cash conversion cycle of Pentair plc indicates some volatility but also showcases periods of improved efficiency in working capital management. Monitoring this cycle closely can help assess the company's ability to generate cash flow from its operations and provide insights into its overall financial health and liquidity position.
Peer comparison
Dec 31, 2023