Textron Inc (TXT)
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 | 1,237.96 | 1,298.35 | 1,137.30 | 1,215.40 | 118.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 1,237.96 | 1,298.35 | 1,137.30 | 1,215.40 | 118.73 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,237.96 + — – —
= 1,237.96
The cash conversion cycle of Textron Inc has shown a fluctuating trend over the past five years. In 2019, the company had a significantly low cash conversion cycle of 118.73 days, indicating efficient management of cash, inventory, and receivables. However, this efficiency deteriorated in 2020, with the cycle increasing to 1,215.40 days, suggesting challenges in converting investments in inventory and receivables into cash.
Subsequently, there was a slight improvement in 2021, with the cycle decreasing to 1,137.30 days, though remaining significantly higher than the 2019 levels. This was followed by a further increase in 2022 to 1,298.35 days, indicating prolonged periods in converting inputs into cash flows.
The latest data for 2023 shows a cash conversion cycle of 1,237.96 days, which is marginally lower than the previous year but still reflects a prolonged cycle. The company may face challenges in managing its working capital efficiently, leading to delays in converting resources into cash.
Overall, Textron Inc's cash conversion cycle has experienced fluctuations, and it is essential for the company to focus on improving operational efficiency and liquidity management to reduce the cycle duration and enhance its financial performance.
Peer comparison
Dec 31, 2023