Resideo Technologies Inc (REZI)
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 | 92.48 | 93.40 | 96.13 | 74.99 | 75.35 | 77.59 | 79.19 | 78.83 | 77.23 | 76.99 | 80.02 | 78.15 | 63.03 | 60.20 | 59.20 | 63.51 | 65.27 | 61.10 | 61.62 | 64.62 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 92.48 | 93.40 | 96.13 | 74.99 | 75.35 | 77.59 | 79.19 | 78.83 | 77.23 | 76.99 | 80.02 | 78.15 | 63.03 | 60.20 | 59.20 | 63.51 | 65.27 | 61.10 | 61.62 | 64.62 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 92.48 + — – —
= 92.48
The cash conversion cycle of Resideo Technologies Inc has shown some fluctuations over the past few years. From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 59.20 days to a high of 96.13 days.
A shorter cash conversion cycle indicates that Resideo is taking less time to convert its investments in inventory and other resources into cash receipts from sales. This could be a positive indicator of operational efficiency and effective management of working capital.
On the other hand, an increasing trend in the cash conversion cycle, as seen towards the end of the data period, suggests that Resideo may be facing challenges in managing its working capital effectively. A longer cash conversion cycle may indicate issues with inventory management, accounts receivable collection, or payment of accounts payable.
Resideo Technologies Inc should monitor its cash conversion cycle closely to ensure that it remains at an optimal level, balancing the need to maintain sufficient liquidity with the goal of maximizing operational efficiency and profitability. Regular analysis and possible adjustments to inventory management, sales policies, and payment terms may be necessary to improve the cash conversion cycle and overall financial performance.