Sturm Ruger & Company Inc (RGR)
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 | 71.02 | 68.65 | 59.50 | 54.07 | 57.06 | 54.66 | 49.24 | 38.24 | 35.47 | 31.61 | 26.98 | 26.13 | 28.12 | 14.05 | 13.21 | 21.05 | 33.22 | 37.87 | 45.92 | 38.33 |
| Days of sales outstanding (DSO) | days | 40.18 | 38.88 | 33.34 | — | 40.09 | — | — | — | 28.49 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 9.88 | — | — | — | 11.66 | — | — | — | 9.88 | — | — | — | 12.37 | — | — | — | 9.79 | — | — | — |
| Cash conversion cycle | days | 101.33 | 107.53 | 92.85 | 54.07 | 85.49 | 54.66 | 49.24 | 38.24 | 54.09 | 31.61 | 26.98 | 26.13 | 15.74 | 14.05 | 13.21 | 21.05 | 23.43 | 37.87 | 45.92 | 38.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 71.02 + 40.18 – 9.88
= 101.33
The cash conversion cycle of Sturm, Ruger & Co., Inc. has shown some fluctuations over the past eight quarters. The company's cash conversion cycle ranged from a high of 107.53 days in Q3 2023 to a low of 73.74 days in Q1 2022, reflecting variability in the efficiency of its working capital management.
A cash conversion cycle above 90 days indicates that the company takes a significant amount of time to convert its investments in inventory back into cash. Conversely, a cycle below 90 days suggests that the company is able to more quickly convert its inventory into sales and collect cash from customers.
Sturm, Ruger & Co., Inc. experienced an overall increasing trend in its cash conversion cycle from Q1 2022 to Q3 2023, indicating potential inefficiencies in managing its working capital. The jump from the lowest cycle of 73.74 days in Q1 2022 to the highest cycle of 107.53 days in Q3 2023 may raise concerns about the company's ability to efficiently control inventory, collect receivables, and manage payables during these periods.
It is crucial for the company to closely monitor its cash conversion cycle and implement strategies to shorten the cycle, such as improving inventory turnover, optimizing accounts receivable collections, and extending accounts payable payment terms. By effectively managing its cash conversion cycle, Sturm, Ruger & Co., Inc. can potentially enhance its liquidity position and overall financial performance.
Peer comparison
Dec 31, 2023