Resideo Technologies Inc (REZI)
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 | 64.73 | 66.00 | 67.42 | 67.22 | 62.79 | 62.78 | 65.16 | 63.48 | 51.27 | 48.74 | 47.39 | 52.58 | 56.63 | 53.59 | 54.07 | 53.10 | 50.35 | 59.16 | 60.25 | |
| Days of sales outstanding (DSO) | days | 57.34 | 58.08 | 60.68 | 56.51 | 57.98 | — | — | — | 55.26 | — | — | — | 62.29 | 66.39 | 54.42 | 60.87 | 60.40 | 62.96 | 62.34 | |
| Number of days of payables | days | 62.25 | 58.72 | 63.85 | 59.62 | 57.57 | 61.40 | 66.24 | 65.96 | 61.18 | 62.13 | 63.40 | 70.11 | 78.88 | 74.40 | 71.41 | 71.70 | 69.04 | 75.63 | 84.20 | |
| Cash conversion cycle | days | 59.81 | 65.36 | 64.25 | 64.11 | 63.19 | 1.38 | -1.07 | -2.48 | 45.35 | -13.39 | -16.01 | -17.53 | 40.04 | 45.58 | 37.07 | 42.27 | 41.72 | 46.48 | 38.39 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.73 + 57.34 – 62.25
= 59.81
The cash conversion cycle of Resideo Technologies Inc has shown some fluctuation over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash, indicating efficiency in managing working capital.
In Q4 2023, the cash conversion cycle decreased to 59.79 days from 66.13 days in the previous quarter, which suggests an improvement in the company's ability to convert its resources into cash. However, this cycle is still longer compared to Q1 2022 and Q2 2022.
The company experienced the longest cash conversion cycle in Q3 2023 at 66.13 days, which may indicate potential issues in managing inventory and collecting receivables efficiently during that quarter.
Overall, the trend in the cash conversion cycle of Resideo Technologies Inc shows some variability, with fluctuations observed over the quarters analyzed. It is important for the company to closely monitor and manage its working capital components to optimize its cash conversion cycle and enhance overall financial performance.