Visteon Corp (VC)
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 | 31.37 | 37.49 | 37.96 | 28.05 | 23.53 |
| Days of sales outstanding (DSO) | days | 91.30 | 81.44 | 92.27 | 94.83 | 83.29 |
| Number of days of payables | days | 58.01 | 70.78 | 75.64 | 79.24 | 71.16 |
| Cash conversion cycle | days | 64.66 | 48.15 | 54.60 | 43.64 | 35.66 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.37 + 91.30 – 58.01
= 64.66
The cash conversion cycle for Visteon Corp. has been fluctuating over the past five years. It decreased from 28.72 days in 2019 to 33.18 days in 2020 before increasing to 46.17 days in 2021. Subsequently, there was a slight improvement as it decreased to 42.12 days in 2022 and further to 41.31 days in 2023.
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to generate cash more quickly from its operating activities, which is generally favorable. Conversely, a longer cycle suggests inefficiencies in managing working capital and potentially cash flow challenges.
Overall, while there have been fluctuations in Visteon Corp.'s cash conversion cycle over the past five years, the recent decrease observed in 2023 compared to the previous year is a positive trend indicating potential improvements in managing working capital and cash flow efficiency. Monitoring this metric can provide valuable insights into the company's liquidity and operational performance.
Peer comparison
Dec 31, 2023