Westinghouse Air Brake Technologies Corp (WAB)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 95.98 | 98.63 | 101.28 | 88.40 | 87.62 |
| Days of sales outstanding (DSO) | days | 40.57 | 45.66 | 47.08 | 51.72 | 48.20 |
| Number of days of payables | days | 53.92 | 53.98 | 64.78 | 52.97 | 48.50 |
| Cash conversion cycle | days | 82.63 | 90.32 | 83.58 | 87.15 | 87.31 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.98 + 40.57 – 53.92
= 82.63
Westinghouse Air Brake Technologies Corp's cash conversion cycle has shown some fluctuations over the analyzed period. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
As of December 31, 2020, the company's cash conversion cycle stood at 87.31 days. Over the subsequent years, the cycle exhibited some variability, decreasing to 87.15 days by December 31, 2021, and further declining to 83.58 days by the end of 2022. However, by December 31, 2023, the cash conversion cycle had increased to 90.32 days before dropping to 82.63 days as of December 31, 2024.
The downward trend in the cash conversion cycle from 2020 to 2022 suggests that Westinghouse Air Brake Technologies Corp was becoming more efficient in managing its cash flow and converting its investments into cash. However, the subsequent increase in 2023 indicates a potential delay in the conversion process, which was then improved upon by the end of 2024.
Overall, monitoring and managing the cash conversion cycle is crucial for the company to ensure efficient working capital management and optimize its operations.
Peer comparison
Dec 31, 2024