Interface Inc (TILE)
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 | 87.24 | 90.92 | 87.59 | 72.33 | 75.93 |
| Days of sales outstanding (DSO) | days | 48.65 | 52.80 | 53.52 | 47.53 | 49.17 |
| Number of days of payables | days | 19.67 | 23.23 | 28.39 | 18.56 | 22.66 |
| Cash conversion cycle | days | 116.23 | 120.49 | 112.72 | 101.30 | 102.44 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.24 + 48.65 – 19.67
= 116.23
Interface Inc.'s cash conversion cycle has shown a fluctuating trend over the past five years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, the cash conversion cycle increased to 143.44 days, representing a slowdown in the company's ability to convert its resources into cash compared to the previous year. This could indicate potential challenges in managing inventory, collecting receivables, or efficiently converting sales into cash.
Looking back to 2022, the cash conversion cycle was slightly higher at 148.18 days, indicating that the company took longer to convert its resources into cash compared to 2023. This may suggest inefficiencies in the company's working capital management or potential issues in managing inventory levels and accounts receivables.
In 2021 and 2020, the cash conversion cycle decreased to 137.39 days and 135.87 days, respectively, showing improvements in the company's ability to convert its resources into cash more efficiently. This trend suggests that Interface Inc. may have implemented better inventory management practices or enhanced its collections process during these years.
Back in 2019, the cash conversion cycle was at its lowest at 127.66 days, indicating that Interface Inc. was able to convert its resources into cash more quickly compared to the following years. This could imply that the company was more efficient in managing its working capital and operating cycle in 2019.
Overall, Interface Inc.'s cash conversion cycle reveals some variability over the years, emphasizing the importance of monitoring working capital management practices to ensure efficient operations and cash flow generation.
Peer comparison
Dec 31, 2023