Interface Inc (TILE)
Cash conversion cycle
| 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 | Jul 5, 2020 | Apr 5, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 94.60 | 133.51 | 129.76 | 139.48 | 127.05 | 98.14 | 99.14 | 103.60 | 87.81 | 89.33 | 123.16 | 175.74 | 215.22 | 697.57 | 222.36 | 133.33 | 102.35 | 104.64 | 107.54 | 170.03 |
| Days of sales outstanding (DSO) | days | 48.17 | 42.25 | 48.17 | — | 52.80 | — | — | — | 53.52 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 21.32 | 34.89 | 31.44 | 38.19 | 32.46 | 25.72 | 28.86 | 28.21 | 28.46 | 25.24 | 39.30 | 52.08 | 55.22 | 179.77 | 54.72 | 33.78 | 30.55 | 28.62 | 26.76 | 43.43 |
| Cash conversion cycle | days | 121.44 | 140.87 | 146.48 | 101.28 | 147.39 | 72.42 | 70.28 | 75.39 | 112.88 | 64.09 | 83.86 | 123.66 | 160.00 | 517.80 | 167.65 | 99.55 | 71.80 | 76.02 | 80.77 | 126.59 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 94.60 + 48.17 – 21.32
= 121.44
Interface Inc.'s cash conversion cycle fluctuated over the past eight quarters, with Q4 2023 showing a positive trend compared to the previous quarters. 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. An increasing cycle indicates longer periods for investment recovery.
The average cash conversion cycle for Interface Inc. in 2023 was approximately 140.08 days, down from the 146.02 days in 2022. This improvement suggests enhanced efficiency in managing its inventory, accounts receivable, and accounts payable. It is essential for the company to focus on maintaining or further reducing this cycle to enhance liquidity and maximize working capital efficiency.
In conclusion, Interface Inc. should continue to monitor and manage its cash conversion cycle closely, as it plays a significant role in the company's overall financial health and operational efficiency.
Peer comparison
Dec 31, 2023