Trinity Industries Inc (TRN)
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 | 93.59 | 127.91 | 118.20 | 45.34 | 59.60 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 93.59 | 127.91 | 118.20 | 45.34 | 59.60 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.59 + — – —
= 93.59
The cash conversion cycle, which reflects the efficiency of Trinity Industries, Inc. in managing its working capital, has exhibited fluctuations over the past five years. In 2023, the cash conversion cycle stood at 101.43 days, reflecting an improvement compared to the previous two years. This suggests that Trinity Industries has been able to convert its investments in inventory into cash more quickly than before. However, it is worth noting that the cycle was longer in 2022 and 2020, at 138.69 days and 157.59 days respectively, indicating a potential inefficiency in managing cash, inventory, and accounts receivable during those periods.
The lowest cash conversion cycle was recorded in 2019 at 68.79 days, suggesting that Trinity Industries was exceptionally effective in converting its resources into cash during that year. Conversely, the cycle was longer in 2021 at 127.28 days, demonstrating a temporary slowdown in the conversion process.
Overall, Trinity Industries appears to have made progress in optimizing its cash conversion cycle in 2023, indicating potential improvements in working capital management. However, the company should continue monitoring and enhancing its efficiency in converting investments into cash to support its overall financial health and operations.
Peer comparison
Dec 31, 2023