Wabash National Corporation (WNC)
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 | 47.93 | 40.84 | 53.98 | 45.21 | 33.90 |
| Days of sales outstanding (DSO) | days | 28.04 | 37.63 | 37.83 | 29.40 | 28.56 |
| Number of days of payables | days | 28.04 | 31.68 | 39.51 | 28.83 | 24.45 |
| Cash conversion cycle | days | 47.92 | 46.79 | 52.29 | 45.78 | 38.00 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.93 + 28.04 – 28.04
= 47.92
The cash conversion cycle for Wabash National Corp. has shown some fluctuation over the past five years. In 2023, the company's cash conversion cycle was 46.21 days, slightly lower than the previous year's 46.45 days. This indicates that the company took approximately 46 days to convert its investments in inventory and accounts receivable into cash receipts from customers.
Compared to 2021, where the cash conversion cycle was 50.19 days, there appears to have been an improvement in the efficiency of Wabash National Corp.'s cash management in recent years. However, it is important to note that in 2020 and 2019, the company had even lower cash conversion cycles of 41.33 days and 36.63 days respectively, indicating that cash was being converted at a faster pace during those years.
Overall, Wabash National Corp. should continue monitoring and optimizing its cash conversion cycle to ensure efficient management of its working capital and liquidity position.