Xpel Inc (XPEL)

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
Days of inventory on hand (DOH)	days	116.28	108.70	101.43	108.85	107.15	94.37	106.66	112.83	85.53	72.01	52.30	59.05	59.80	53.35	44.03	58.46
Days of sales outstanding (DSO)	days	22.90	23.94	24.70	23.22	16.69	20.89	24.52	19.89	19.44	23.30	21.41	19.84	22.92	21.92	18.98	20.04
Number of days of payables	days	26.46	35.76	26.74	17.31	22.19	30.51	42.47	54.80	41.46	49.17	36.13	38.29	34.72	33.39	33.95	28.07
Cash conversion cycle	days	112.72	96.88	99.38	114.76	101.64	84.75	88.70	77.92	63.51	46.14	37.58	40.60	47.99	41.88	29.06	50.43

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 116.28 + 22.90 – 26.46
= 112.72

The cash conversion cycle of XPEL Inc has shown some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 151.25 days, which was higher compared to the previous three quarters. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during this period.

In comparison, in Q2 and Q3 2022, the company had relatively lower cash conversion cycles of 112.62 days and 107.98 days respectively, suggesting that XPEL Inc was more efficient in managing its working capital during those quarters.

Overall, XPEL Inc should focus on monitoring and managing its cash conversion cycle effectively to ensure efficient utilization of resources and timely cash flows. A shorter cash conversion cycle indicates better liquidity and operational efficiency, while a longer cycle may signal potential inefficiencies in working capital management.