Titan International Inc (TWI)

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	80.12	74.12	85.02	82.73	82.80
Days of sales outstanding (DSO)	days	48.06	52.23	57.65	60.02	50.61
Number of days of payables	days	44.15	49.14	60.22	47.10	39.41
Cash conversion cycle	days	84.03	77.20	82.45	95.65	94.01

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.12 + 48.06 – 44.15
= 84.03

The cash conversion cycle of Titan International, Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 83.62 days from 71.99 days in 2022, indicating that it took the company longer to convert its investments in inventory and accounts receivable back into cash during the year. This could be a sign of inefficiency in managing its working capital.

Comparing to 2021, where the cycle was 79.67 days, the increase in the cash conversion cycle in 2023 also suggests that the company faced challenges in optimizing its cash flow and operational efficiency. However, the cycle was still lower in 2023 compared to the levels seen in 2020 and 2019, which were 96.94 days and 95.69 days, respectively.

Overall, Titan International, Inc. needs to focus on improving its cash conversion cycle by streamlining its operations, managing inventory levels effectively, and collecting accounts receivable more efficiently to enhance its working capital management and overall financial performance.