Titan International Inc (TWI)

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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 80.12 74.57 73.87 73.26 73.72 76.95 80.96 85.18 85.03 86.53 86.47 85.94 82.86 82.18 82.11 79.03 82.86 84.90 91.70 96.87
Days of sales outstanding (DSO) days 47.98 45.52 50.21 55.81 52.23 48.55 53.54 59.42 57.65 59.22 66.24 69.04 60.04 58.56 56.60 57.96 50.38 54.24 64.83 68.74
Number of days of payables days 44.15 40.27 45.28 52.00 48.88 47.84 54.54 60.72 60.23 58.88 59.84 60.75 47.18 43.62 38.14 46.46 39.43 44.00 49.84 58.96
Cash conversion cycle days 83.96 79.81 78.79 77.07 77.07 77.67 79.96 83.88 82.45 86.86 92.87 94.22 95.73 97.11 100.57 90.53 93.81 95.15 106.70 106.65

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.12 + 47.98 – 44.15
= 83.96

The cash conversion cycle for Titan International, Inc. has shown some fluctuation over the past eight quarters, ranging from a low of 71.99 days in Q4 2022 to a high of 85.19 days in Q1 2022. Generally, the trend has been increasing, indicating a lengthening time period required to convert company investments in inventory back into cash.

In Q4 2023, the cash conversion cycle was 83.62 days, slightly higher than the previous quarter at 82.24 days. This suggests that the company took slightly longer to convert its investments in raw materials and finished goods into final sales and ultimately cash in the most recent quarter.

Overall, a downward trend in the cash conversion cycle would be preferable as it indicates that the company is efficiently managing its working capital and converting its inventory and receivables into cash more quickly. Conversely, an increasing trend, as observed in this case, may raise concerns about inventory management, accounts receivable collection, or overall operational efficiency. Further analysis of the components of the cash conversion cycle would be necessary to pinpoint areas for improvement and optimize the company's cash flow management.