Whirlpool Corporation (WHR)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.31 | 47.09 | 49.15 | 45.08 | 39.85 | 53.69 | 58.83 | 58.19 | 49.65 | 55.31 | 51.52 | 50.11 | 48.51 | 46.99 | 44.67 | 50.59 | 47.37 | 54.92 | 56.96 | 54.10 |
| Days of sales outstanding (DSO) | days | 29.38 | 39.16 | 35.80 | 34.33 | 32.03 | 43.64 | 47.68 | 48.47 | 51.63 | 53.02 | 51.20 | 53.75 | 58.73 | 52.44 | 37.94 | 34.75 | 38.74 | 45.01 | 42.09 | 39.11 |
| Number of days of payables | days | 70.95 | 67.70 | 69.64 | 66.48 | 64.40 | 82.75 | 92.55 | 97.64 | 98.92 | 98.60 | 94.69 | 94.81 | 101.92 | 88.62 | 69.82 | 80.86 | 88.35 | 80.56 | 80.86 | 78.78 |
| Cash conversion cycle | days | 2.74 | 18.55 | 15.31 | 12.93 | 7.48 | 14.58 | 13.95 | 9.02 | 2.36 | 9.73 | 8.03 | 9.06 | 5.33 | 10.81 | 12.79 | 4.47 | -2.24 | 19.37 | 18.19 | 14.44 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.31 + 29.38 – 70.95
= 2.74
The cash conversion cycle for Whirlpool Corp. has shown some variability over the past eight quarters.
In Q4 2023, the company had a negative cash conversion cycle of -1.59 days, indicating that it was able to convert its inventory into cash before paying its suppliers and other creditors. This suggests efficient management of working capital during that period.
In Q3 2023, the cash conversion cycle increased to 11.39 days, which might indicate challenges in managing cash flow and working capital efficiency. The increase in the cycle could be due to slower inventory turnover or longer accounts receivable collection period.
Q2 and Q1 2023 also saw longer cash conversion cycles of 8.73 days and 5.51 days, respectively. This trend may indicate a need for the company to streamline its operational processes, improve inventory management, or tighten credit terms with customers to shorten the cycle.
Comparing the data to the same quarters in 2022, it is clear that Whirlpool Corp. has experienced fluctuations in its cash conversion cycle over the past year. In Q4 2022, the cycle was only 0.56 days, indicating a very short period for the company to convert its resources into cash.
In Q3 and Q2 2022, the cash conversion cycle increased to 9.40 days and 7.92 days, respectively, before decreasing in Q1 2022 to 3.94 days. These fluctuations suggest that Whirlpool Corp. may be experiencing periodic challenges in managing its working capital efficiency.
Overall, analyzing Whirlpool Corp.'s cash conversion cycle data shows fluctuations and variability in the company's ability to convert its resources into cash over the past eight quarters. It may be beneficial for the company to focus on improving inventory turnover, managing accounts receivable effectively, and optimizing its overall working capital management to maintain a healthier and more consistent cash conversion cycle.
Peer comparison
Dec 31, 2023