Skyline Corporation (SKY)
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 | 54.99 | 54.85 | 57.55 | 62.46 | 60.37 | 38.37 | 37.04 | 35.17 | 36.70 | 40.64 | 53.37 | 46.81 | 38.37 | 40.52 | 47.73 | 47.67 | 41.20 | 39.74 | 35.12 | 35.73 |
| Days of sales outstanding (DSO) | days | 10.37 | 11.74 | 12.19 | 11.68 | 8.91 | 9.97 | 7.87 | 9.44 | 6.29 | — | — | 14.99 | — | — | — | 14.80 | 11.85 | 13.82 | 12.48 | 12.20 |
| Number of days of payables | days | 7.30 | 10.83 | 11.05 | 9.96 | 9.10 | 10.70 | 8.90 | 7.77 | 6.54 | 12.00 | 13.91 | 17.87 | 9.16 | 12.99 | 16.46 | 16.42 | 12.13 | 13.72 | 9.81 | 10.94 |
| Cash conversion cycle | days | 58.06 | 55.76 | 58.68 | 64.18 | 60.17 | 37.63 | 36.00 | 36.83 | 36.45 | 28.65 | 39.46 | 43.92 | 29.20 | 27.53 | 31.27 | 46.04 | 40.92 | 39.84 | 37.79 | 36.98 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 54.99 + 10.37 – 7.30
= 58.06
The cash conversion cycle is a critical financial metric that indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Analyzing the data provided for Skyline Corporation, we observe fluctuations in the company's cash conversion cycle over the reported periods.
Initially, from March 31, 2020, to December 31, 2021, the cash conversion cycle showed a general increase, indicating potential inefficiencies in managing cash flows, inventory, and accounts receivable. However, from March 31, 2021, to December 31, 2022, there was a sharper decline in the cash conversion cycle, suggesting improved operational efficiency.
Despite the improvements made, there was a notable increase in the cash conversion cycle between December 31, 2022, and June 30, 2024, signaling a possible slowdown in the company's ability to convert investments into cash. This trend continued through the subsequent periods, with the cycle fluctuating within a range but showing an overall increasing trend.
It is essential for Skyline Corporation to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. By identifying inefficiencies and implementing strategies to streamline operations, the company can enhance its liquidity position and overall financial performance.
Peer comparison
Dec 31, 2024