Standard Motor Products Inc (SMP)

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	224.40	188.31	191.46	201.76	197.78	187.05	192.89	199.46	202.34	204.53	212.83	211.18	194.41	179.79	181.20	187.78	168.29	156.71	180.76	181.66
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	224.40	188.31	191.46	201.76	197.78	187.05	192.89	199.46	202.34	204.53	212.83	211.18	194.41	179.79	181.20	187.78	168.29	156.71	180.76	181.66

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 224.40 + — – —
= 224.40

The Cash Conversion Cycle (CCC) of Standard Motor Products Inc has fluctuated over the past few years. The CCC measures how long it takes for a company to convert its resources into cash flows from sales.

In the initial quarters of 2020, the CCC ranged between 156.71 days and 187.78 days, suggesting the company was taking approximately 157 to 188 days to convert its resources into sales and eventually into cash inflows.

There was a notable increase in the CCC during 2021, with figures reaching as high as 211.18 days by the end of March 2022. This increase may indicate issues with the management of inventory, accounts receivable, or accounts payable during this period.

Subsequently, the CCC decreased slightly in the following quarters but remained elevated compared to the earlier years. Despite some fluctuations, the company seemed to face challenges in efficiently managing its working capital during this period, as evidenced by the extended cycle periods.

As of December 31, 2024, the CCC surged to 224.40 days. This significant increase might indicate prolonged time frames in inventory turnover, collection from customers, or payment to suppliers, which could potentially affect the company's liquidity and overall financial performance.

Overall, the analysis of Standard Motor Products Inc's CCC suggests a need for close monitoring and potential improvements in working capital management to enhance cash flow efficiency and operational performance in the future.