Xylem Inc (XYL)
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 | 67.95 | 79.96 | 84.83 | 79.35 | 66.86 |
| Days of sales outstanding (DSO) | days | 71.11 | 80.15 | 72.44 | 66.96 | 69.09 |
| Number of days of payables | days | 68.63 | 76.03 | 76.76 | 72.43 | 68.18 |
| Cash conversion cycle | days | 70.42 | 84.07 | 80.51 | 73.87 | 67.77 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.95 + 71.11 – 68.63
= 70.42
The cash conversion cycle of Xylem Inc has shown a fluctuating trend over the past five years. Starting at 67.77 days in December 2020, the cycle increased to 73.87 days in December 2021. Further, it continued to rise, reaching 80.51 days by December 2022 and 84.07 days by December 2023. However, there was a decrease in the cycle in December 2024, down to 70.42 days.
This trend indicates that Xylem Inc took longer to convert its resources into cash in 2023, which might imply inefficiencies in managing inventory, receivables, and payables during that period. The subsequent improvement in 2024 suggests that the company may have implemented measures to streamline its cash conversion process.
Overall, a detailed analysis of the cash conversion cycle is crucial for understanding the efficiency of Xylem Inc's working capital management and identifying areas for potential improvement in its operational processes.
Peer comparison
Dec 31, 2024