Trimble Inc (TRMB)
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 | 58.69 | 93.53 | 81.62 | 78.82 | 76.43 |
| Days of sales outstanding (DSO) | days | 67.89 | 67.21 | 66.26 | 71.85 | 67.86 |
| Number of days of payables | days | 41.16 | 40.78 | 46.57 | 37.41 | 39.01 |
| Cash conversion cycle | days | 85.42 | 119.96 | 101.31 | 113.26 | 105.28 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.69 + 67.89 – 41.16
= 85.42
The cash conversion cycle of Trimble Inc has shown some fluctuation over the past five years. In 2023, the company's cash conversion cycle improved to 85.42 days compared to the previous year's 119.96 days, indicating a more efficient management of its cash flow and working capital. This trend is positive as a shorter cycle suggests that Trimble is taking less time to convert its investments in inventory and other resources into cash.
In 2021, there was a slight increase in the cash conversion cycle to 101.31 days from 113.26 days in 2020. This could suggest some delays in converting investments to cash during that year. However, the cycle decreased from 2019 to 2020, indicating that the company managed to improve its efficiency in cash conversion.
Overall, the downward trend in the cash conversion cycle over the past two years reflects Trimble's efforts to enhance its working capital management. It is crucial for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient use of resources and maintain healthy cash flows.
Peer comparison
Dec 31, 2023