Waters Corporation (WAT)

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 66.01 90.82 84.41 70.50 68.37
Days of sales outstanding (DSO) days 91.58 90.17 91.23 81.73 90.62
Number of days of payables days 13.82 14.90 17.28 19.17 16.23
Cash conversion cycle days 143.77 166.09 158.36 133.07 142.76

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.01 + 91.58 – 13.82
= 143.77

The cash conversion cycle for Waters Corporation has shown some fluctuations over the period under consideration. In December 2020, the company's cash conversion cycle stood at 142.76 days. By December 2021, the cycle improved to 133.07 days, indicating a more efficient management of cash flow. However, in December 2022, the cycle increased to 158.36 days, suggesting a slowdown in the process of converting inventory and receivables into cash.

Furthermore, by December 2023, the cash conversion cycle lengthened to 166.09 days, signifying potential challenges in managing working capital effectively. Nevertheless, in December 2024, there was a slight improvement as the cycle reduced to 143.77 days, indicating efforts to enhance cash conversion efficiency.

Overall, Waters Corporation should continue to monitor and possibly streamline its cash conversion cycle to ensure optimal utilization of cash resources and strengthen its financial position.