Rollins Inc (ROL)
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 | 4.74 | 4.89 | 4.95 | 4.85 | 4.77 | 4.48 | 4.84 | 5.03 | 5.18 | 4.48 | 5.11 | 5.71 | 5.44 | 7.12 | 8.99 | 6.50 | 7.15 | 6.65 | 6.91 | 6.68 |
| Days of sales outstanding (DSO) | days | 25.59 | 29.09 | 27.29 | 24.99 | 25.67 | 28.44 | 27.88 | 24.51 | 25.30 | 27.86 | 2.90 | 3.16 | 3.39 | 3.27 | 3.38 | 2.62 | 26.27 | 29.12 | 29.48 | 24.54 |
| Number of days of payables | days | 6.99 | 6.53 | 11.27 | 6.14 | 6.86 | 6.73 | 8.32 | 6.67 | 7.99 | 6.40 | 12.75 | 11.66 | 11.40 | 13.22 | 12.68 | 11.12 | 12.94 | 12.51 | 14.80 | 11.08 |
| Cash conversion cycle | days | 23.35 | 27.44 | 20.97 | 23.70 | 23.57 | 26.19 | 24.40 | 22.86 | 22.49 | 25.94 | -4.75 | -2.79 | -2.57 | -2.82 | -0.31 | -2.00 | 20.48 | 23.25 | 21.59 | 20.14 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.74 + 25.59 – 6.99
= 23.35
The cash conversion cycle of Rollins, Inc. has shown fluctuations over the past eight quarters. In Q2 2023, the company achieved its most efficient cash conversion cycle at 16.25 days, indicating that it took on average 16.25 days to convert its investments in raw materials and other inputs into sales and then into cash. This may imply effective management of inventory, accounts receivable, and accounts payable during the period.
The cash conversion cycle increased in Q3 2023 to 26.12 days, signifying a temporary delay in converting investments into cash flows. Nevertheless, the efficiency improved in Q4 2023, with the cash conversion cycle decreasing to 21.64 days. This suggests that the company streamlined its working capital management and turned goods into cash more swiftly.
Comparing the data from the same quarter of the previous year, there is a general trend of improvement in the cash conversion cycle. In Q4 2022, the company had a cash conversion cycle of 22.00 days, which reduced to 21.27 days in Q1 2022. This suggests that Rollins, Inc. has been making progress in its operational efficiency and cash flow management over time.
Overall, a lower cash conversion cycle indicates that the company is efficiently managing its working capital and converting investments into cash quickly. Rollins, Inc. should continue monitoring and optimizing its cash conversion cycle, striving for efficiency and effectiveness in its operations to enhance its financial performance.
Peer comparison
Dec 31, 2023