Teledyne Technologies Incorporated (TDY)

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	70.96	70.59	65.41	47.09	51.73
Days of sales outstanding (DSO)	days	78.92	78.59	87.71	73.62	21.90
Number of days of payables	days	29.75	40.08	40.79	31.06	35.65
Cash conversion cycle	days	120.13	109.10	112.33	89.64	37.98

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.96 + 78.92 – 29.75
= 120.13

Teledyne Technologies Inc's cash conversion cycle has shown some fluctuations over the past five years. The company's cash conversion cycle measures the length of time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, the cash conversion cycle increased to 138.73 days from 122.38 days in 2022. This indicates that Teledyne Technologies took longer to convert its investments in inventory into cash from sales, potentially leading to a decrease in liquidity and efficiency.

Comparing 2023 to prior years, the cash conversion cycle was higher than in 2021 and 2019. This suggests that in 2023, Teledyne Technologies faced challenges in managing its working capital effectively, potentially due to factors such as a slowdown in sales, difficulties in managing inventory levels, or delayed payments from customers.

Overall, monitoring the cash conversion cycle is crucial for evaluating Teledyne Technologies' operational efficiency and liquidity management. A decreasing trend in the cash conversion cycle over time would typically indicate improved efficiency in managing working capital and converting investments into cash.