Standard Motor Products Inc (SMP)

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	132.97	136.18	142.09	147.95	139.04	153.62	160.53	158.94	130.86	132.18	133.32	137.84	105.16	113.74	131.58	132.00	111.94	117.16	130.08	128.36
Days of sales outstanding (DSO)	days	21.66	27.94	29.39	28.26	22.53	30.70	30.81	30.60	25.40	36.26	35.04	31.50	36.65	45.00	36.25	30.67	24.36	30.29	32.51	32.15
Number of days of payables	days	30.78	29.30	26.95	26.75	25.52	29.87	40.78	41.45	42.48	41.06	39.39	38.27	35.52	28.95	26.86	28.92	32.13	24.50	30.90	34.05
Cash conversion cycle	days	123.84	134.81	144.54	149.47	136.05	154.45	150.56	148.08	113.78	127.38	128.97	131.06	106.29	129.79	140.97	133.75	104.18	122.95	131.69	126.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.97 + 21.66 – 30.78
= 123.84

The cash conversion cycle of Standard Motor Products, Inc. has shown fluctuations over the past eight quarters. In Q4 2023, the company had a cash conversion cycle of 200.40 days, which was a slight improvement compared to Q3 2023 where it was 195.61 days. However, it was still higher than the cycle in Q2 2023 and Q1 2023, which were 208.45 days and 213.07 days, respectively.

Looking back at Q4 2022, the cash conversion cycle was at 206.75 days, indicating a decrease in efficiency compared to Q4 2023. The trend observed over the past quarters shows some variability, but generally, the company's cash conversion cycle has been within the 200-220 days range.

A lower cash conversion cycle signifies that the company is more efficient in converting its resources into cash. On the other hand, a higher cycle indicates that the company is taking longer to convert its investments into cash flow, potentially leading to liquidity issues.

Overall, Standard Motor Products, Inc. may benefit from monitoring and managing its cash conversion cycle effectively to ensure optimal cash flow management and operational efficiency.