Simpson Manufacturing Company Inc (SSD)
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 | 125.24 | 124.09 | 115.09 | 120.65 | 120.95 | 112.54 | 117.01 | 128.25 | 127.87 | 130.10 | 142.71 | 131.14 | 140.55 | 129.17 | 105.94 | 106.54 | 106.51 | 100.04 | 104.73 | 101.10 |
| Days of sales outstanding (DSO) | days | 46.52 | 59.50 | 62.54 | 56.87 | 46.95 | 58.87 | 65.83 | 57.76 | 46.62 | 59.43 | 72.17 | 68.23 | 53.82 | 59.73 | 64.56 | 62.41 | 47.64 | 66.52 | 71.84 | 52.75 |
| Number of days of payables | days | 21.32 | 23.47 | 22.57 | 22.36 | 23.58 | 21.25 | 21.87 | 21.20 | 22.47 | 23.77 | 29.86 | 22.59 | 18.12 | 20.91 | 20.58 | 23.79 | 18.12 | 16.26 | 19.40 | 17.59 |
| Cash conversion cycle | days | 150.45 | 160.12 | 155.06 | 155.16 | 144.32 | 150.16 | 160.98 | 164.81 | 152.02 | 165.76 | 185.02 | 176.78 | 176.26 | 167.99 | 149.92 | 145.16 | 136.03 | 150.29 | 157.18 | 136.25 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 125.24 + 46.52 – 21.32
= 150.45
The cash conversion cycle of Simpson Manufacturing Company Inc has fluctuated over the period under review. It is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the company's cash conversion cycle ranged from 136.03 days to 185.02 days. The cycle peaked in June 30, 2022, at 185.02 days and generally decreased thereafter. This indicates that the company was able to manage its working capital more efficiently during the latter part of the period.
Overall, a lower cash conversion cycle is favorable as it signifies that the company is collecting cash from sales more quickly and managing its inventory effectively. However, it is essential to analyze the trend in conjunction with other financial metrics to assess the company's overall financial health and operational efficiency.
Peer comparison
Dec 31, 2024