Resideo Technologies Inc (REZI)
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 | 92.90 | 75.55 | 77.30 | 63.03 | 65.27 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 92.90 | 75.55 | 77.30 | 63.03 | 65.27 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 92.90 + — – —
= 92.90
The cash conversion cycle of Resideo Technologies Inc has shown varying trends over the past five years. In December 2020, the cash conversion cycle was recorded at 65.27 days, indicating the time it took for the company to convert its investments in inventory and other resources into cash flows. This metric slightly improved to 63.03 days by December 2021, suggesting a more efficient management of working capital.
However, there was a significant increase in the cash conversion cycle by December 2022, reaching 77.30 days, and further rising to 75.55 days by December 2023. These higher values may indicate potential challenges in managing inventory levels, collecting receivables, or extending payment periods.
By December 2024, the cash conversion cycle peaked at 92.90 days, signifying a substantial delay in converting investments into cash. This prolonged cycle may lead to liquidity concerns and inefficiencies within the company's operations.
Overall, Resideo Technologies Inc should closely monitor its cash conversion cycle and implement strategies to streamline its working capital management for improved financial performance and liquidity.