Xpel Inc (XPEL)
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 | 166.56 | 166.22 | 149.68 | 113.79 | 77.82 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 166.56 | 166.22 | 149.68 | 113.79 | 77.82 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 166.56 + — – —
= 166.56
The cash conversion cycle of Xpel Inc has shown a steady increase over the years, indicating a potential inefficiency in managing its working capital.
As of December 31, 2020, the cash conversion cycle was 77.82 days, reflecting the average number of days it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
By December 31, 2021, the cash conversion cycle had increased to 113.79 days, suggesting a prolonged period between the company's initial investment in inventory and the realization of cash receipts from sales.
The trend continued to rise, reaching 149.68 days by December 31, 2022, and then further increasing to 166.22 days by December 31, 2023. This prolonged cash conversion cycle may indicate challenges in efficiently managing the company's operating cycle and working capital.
By December 31, 2024, the cash conversion cycle remained high at 166.56 days, highlighting the persistence of the issue. This trend suggests that Xpel Inc may need to focus on optimizing its inventory management, accounts receivable collection, and accounts payable processes to enhance its cash conversion efficiency and overall liquidity position.