Simpson Manufacturing Company Inc (SSD)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 125.24 | 120.87 | 127.82 | 140.47 | 106.54 |
| Days of sales outstanding (DSO) | days | 46.54 | 46.95 | 46.62 | 53.89 | 47.64 |
| Number of days of payables | days | 21.32 | 23.56 | 22.46 | 18.11 | 18.13 |
| Cash conversion cycle | days | 150.46 | 144.26 | 151.98 | 176.25 | 136.05 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 125.24 + 46.54 – 21.32
= 150.46
The cash conversion cycle of Simpson Manufacturing Company Inc has exhibited fluctuations over the past five years. In December 31, 2020, the cash conversion cycle stood at 136.05 days, indicating the company's ability to convert its resources into cash within such period. However, by December 31, 2021, the cash conversion cycle extended to 176.25 days, signifying a delay in the conversion process.
Subsequently, in December 31, 2022, the cash conversion cycle reduced to 151.98 days, showing an improvement in the company's efficiency in converting its resources into cash. By December 31, 2023 and December 31, 2024, the cash conversion cycle further decreased to 144.26 days and 150.46 days, respectively.
Overall, the trend in the cash conversion cycle demonstrates some volatility, with fluctuations in the company's ability to manage its cash flow effectively over the analyzed period. It is essential for Simpson Manufacturing Company Inc to further analyze the underlying factors contributing to these variations and implement strategies to optimize its cash conversion cycle for more stable financial performance.
Peer comparison
Dec 31, 2024