Rollins Inc (ROL)
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 | 5.10 | 5.20 | 5.15 | 4.93 | 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 |
| Days of sales outstanding (DSO) | days | 25.52 | 29.30 | 27.71 | 24.66 | 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 |
| Number of days of payables | days | 6.40 | 7.71 | 7.34 | 5.53 | 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 |
| Cash conversion cycle | days | 24.22 | 26.80 | 25.52 | 24.06 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.10 + 25.52 – 6.40
= 24.22
The cash conversion cycle of Rollins Inc has shown fluctuations over the given period. Initially, the company had negative cash conversion cycle values, indicating that it was able to collect cash from customers faster than paying suppliers and managing inventory. This could be a sign of efficient working capital management.
However, from September 2021 onwards, the cash conversion cycle turned positive, reaching a peak of 27.44 days by September 30, 2023. This indicates that Rollins Inc started taking longer to convert its investments in inventory and accounts receivable into cash, potentially pointing towards operational inefficiencies or changes in the business environment.
Subsequently, the company managed to reduce the cash conversion cycle slightly by December 31, 2024, but it still remained higher compared to the earlier periods. Overall, a higher cash conversion cycle suggests that the company may be facing challenges in managing its working capital effectively, which can impact its liquidity and overall financial health. Further analysis of the underlying reasons behind this trend is advisable to address any potential concerns.
Peer comparison
Dec 31, 2024