Pool Corporation (POOL)

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	128.40	116.29	126.52	149.50	136.76	134.46	142.77	154.21	132.87	106.81	95.86	115.90	101.60	85.19	93.40	133.90	112.69	100.54	116.66	139.73
Days of sales outstanding (DSO)	days	9.60	9.13	12.86	9.96	7.57	11.28	14.79	12.66	10.70	12.53	15.90	10.39	11.34	13.45	15.37	7.38	8.74	11.08	15.11	8.77
Number of days of payables	days	47.83	39.66	44.06	65.57	34.96	38.62	54.63	64.46	39.56	42.40	47.09	75.31	34.70	37.31	51.47	80.76	42.04	34.97	57.51	80.93
Cash conversion cycle	days	90.17	85.77	95.31	93.90	109.38	107.12	102.92	102.42	104.01	76.94	64.68	50.97	78.23	61.32	57.31	60.52	79.40	76.66	74.26	67.57

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 128.40 + 9.60 – 47.83
= 90.17

The cash conversion cycle of Pool Corporation has shown a moderate fluctuation over the past eight quarters. In general, the company takes on average around 120 days to convert its investments in inventory and accounts receivable into cash generated from sales.

The trend indicates that the company has managed to slightly reduce its cash conversion cycle in the most recent quarter compared to the previous quarters, which is a positive sign as it suggests the company is becoming more efficient in managing its working capital.

However, it's worth noting that even though the cash conversion cycle has improved in the most recent quarter, the company should continue to focus on optimizing its inventory management and accounts receivable collection processes to further enhance its cash conversion efficiency.