Trex Company Inc (TREX)
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 | 47.72 | 61.11 | 33.16 | 38.46 | 36.73 |
| Days of sales outstanding (DSO) | days | 16.97 | 40.84 | 46.20 | 47.42 | 39.67 |
| Number of days of payables | days | 10.68 | 8.62 | 9.84 | 21.77 | 9.97 |
| Cash conversion cycle | days | 54.01 | 93.33 | 69.51 | 64.11 | 66.43 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.72 + 16.97 – 10.68
= 54.01
The cash conversion cycle of TREX Co., Inc. has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 64.15 days compared to 103.40 days in 2022. This signifies an improvement in the company's efficiency in managing its cash flow from operations, sales, and payables.
In 2021, the cash conversion cycle was 75.39 days, which was lower than 2020 but higher compared to 2019. This indicates that the company was able to optimize its working capital management in 2021 but faced some challenges in converting its inventory and receivables into cash compared to the previous year.
Overall, it appears that TREX Co., Inc. has been able to effectively manage its cash conversion cycle over the years, with fluctuations reflecting changes in its operational efficiency and liquidity management. It will be important for the company to continue monitoring and improving its cash conversion cycle to ensure sustainable financial health and operational performance.
Peer comparison
Dec 31, 2023