Snap-On Inc (SNA)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3,960.66 | 5,303.54 | 3,622.06 | 2,283.93 | 2,500.41 |
| Days of sales outstanding (DSO) | days | 107.62 | 108.07 | 105.89 | 118.83 | 118.93 |
| Number of days of payables | days | 937.11 | 1,473.35 | 1,250.91 | 681.97 | 652.73 |
| Cash conversion cycle | days | 3,131.18 | 3,938.26 | 2,477.04 | 1,720.79 | 1,966.62 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3,960.66 + 107.62 – 937.11
= 3,131.18
The cash conversion cycle for Snap-On Inc has fluctuated significantly over the past five years. In 2023, the company's cash conversion cycle decreased to 3,131.18 days from 3,938.26 days in 2022. This indicates an improvement in managing its cash, inventory, and receivables during the year.
Compared to 2021, where the cash conversion cycle was 2,477.04 days, the cycle has increased in 2023. This suggests that Snap-On Inc took longer to convert its investments in inventory and accounts receivable into cash during the year.
In 2020 and 2019, the cash conversion cycle was lower at 1,720.79 days and 1,966.62 days, respectively, compared to 2023. This indicates that the company performed better in managing its working capital and converting it into cash in those years.
Overall, the trend in Snap-On Inc's cash conversion cycle shows fluctuations over the past five years, with improvements in some years and deterioration in others. It is essential for the company to continuously monitor and optimize its cash conversion cycle to enhance its operational efficiency and financial performance.
Peer comparison
Dec 31, 2023