Service Corporation International (SCI)
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 | 4.08 | 4.18 | 4.23 | 4.34 | 3.92 | 3.95 | 3.82 | 3.66 | 3.36 | 3.26 | 3.36 | 3.63 | 3.45 | 3.75 | 3.84 | 4.09 | 3.71 | 3.97 | 3.82 | 3.78 |
| Days of sales outstanding (DSO) | days | 8.72 | 7.54 | 7.58 | 9.15 | 8.59 | 7.65 | 8.16 | 9.00 | 9.34 | 8.97 | 8.31 | 8.64 | 9.66 | 8.61 | 8.66 | 8.47 | 9.23 | 8.44 | 9.35 | 9.35 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 12.80 | 11.72 | 11.81 | 13.49 | 12.51 | 11.60 | 11.99 | 12.66 | 12.70 | 12.23 | 11.67 | 12.27 | 13.11 | 12.36 | 12.50 | 12.56 | 12.94 | 12.41 | 13.18 | 13.13 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.08 + 8.72 – —
= 12.80
The cash conversion cycle for Service Corp. International has exhibited variability over the past eight quarters. In Q4 2023, the company reported a negative cash conversion cycle of -1.00 days, indicating that it was able to convert its inventory and accounts receivable into cash before needing to pay its accounts payable. This suggests efficient management of working capital during that period.
Conversely, in Q3 2023, the cash conversion cycle increased to 23.48 days, showing a significant slowdown in the conversion of cash from operating activities. This could be attributed to longer inventory turnover or slower collection of accounts receivable, which may necessitate the company to use more of its own resources to fund its operations.
In Q2 2023 and Q1 2023, the cash conversion cycle stood at 11.81 days and 13.49 days, respectively, indicating relatively stable performance in converting resources into cash during those quarters.
Comparing with the prior-year quarters, Q4 2022 and Q2 2022 also showed negative cash conversion cycles, indicating efficiency in managing working capital, whereas Q3 2022 and Q1 2022 had positive cash conversion cycles, implying a need for the company to finance its operations for a longer period before realizing cash inflows.
Overall, fluctuations in the cash conversion cycle over the quarters suggest variations in Service Corp. International's working capital management efficiency and effectiveness in converting its resources into cash flow. Monitoring and potentially improving this metric could lead to enhanced liquidity and operational effectiveness for the company.
Peer comparison
Dec 31, 2023