Watsco Inc (WSO)
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 | 90.73 | 92.93 | 95.37 | 88.27 | 75.61 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 90.73 | 92.93 | 95.37 | 88.27 | 75.61 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 90.73 + — – —
= 90.73
The cash conversion cycle of Watsco Inc has been fluctuating over the past five years. Starting at 75.61 days on December 31, 2020, it increased to 88.27 days by December 31, 2021. There was a further increase to 95.37 days by December 31, 2022, before decreasing slightly to 92.93 days by December 31, 2023. By December 31, 2024, the cash conversion cycle had decreased again to 90.73 days. This indicates that the company took longer periods to convert its investments in inventory and accounts receivable into cash, which may have implications for its liquidity and operational efficiency. You may want to monitor this trend closely to understand the underlying factors driving these changes.