Westinghouse Air Brake Technologies Corp (WAB)
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 | 98.63 | 101.28 | 88.40 | 87.62 | 86.41 |
| Days of sales outstanding (DSO) | days | 45.66 | 47.08 | 51.72 | 48.20 | 76.37 |
| Number of days of payables | days | 53.98 | 64.78 | 52.97 | 48.50 | 56.41 |
| Cash conversion cycle | days | 90.32 | 83.58 | 87.15 | 87.31 | 106.37 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.63 + 45.66 – 53.98
= 90.32
The cash conversion cycle of Westinghouse Air Brake Technologies Corp has shown some fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
In 2023, the cash conversion cycle was 119.57 days, representing an increase from the previous year. This indicates that the company took longer to convert its investments into cash compared to the prior year. The increase may suggest inefficiencies in managing inventory, collecting receivables, or paying payables.
Comparing to 2021 and 2020, where the cycle was 114.24 days and 117.58 days respectively, 2023's higher cycle suggests a potential delay in the conversion process. However, it is worth noting that the cycle in 2023 is lower than that of 2019, which was 112.01 days.
Overall, Westinghouse Air Brake Technologies Corp's cash conversion cycle has experienced fluctuations, and a higher cycle in 2023 may indicate potential challenges in effectively managing working capital and converting investments into cash. The company may need to focus on improving inventory turnover, receivables collection, and payables management to shorten the cash conversion cycle and enhance overall financial efficiency.
Peer comparison
Dec 31, 2023