Xylem Inc (XYL)
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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 79.96 | 93.46 | 110.90 | 88.49 | 84.83 | 91.61 | 95.04 | 90.05 | 79.35 | 76.56 | 73.16 | 70.22 | 66.86 | 70.04 | 70.95 | 66.31 | 61.42 | 65.89 | 68.72 | 70.66 |
| Days of sales outstanding (DSO) | days | 80.15 | 89.36 | 99.99 | 71.94 | 72.44 | 69.60 | 71.55 | 70.81 | 66.96 | 67.71 | 68.44 | 69.37 | 69.09 | 72.49 | 70.49 | 69.30 | 72.04 | 74.75 | 76.13 | 71.23 |
| Number of days of payables | days | 76.03 | 81.60 | 93.92 | 73.31 | 76.76 | 67.64 | 72.29 | 73.02 | 72.43 | 65.06 | 68.26 | 62.44 | 68.18 | 59.57 | 59.38 | 58.56 | 68.03 | 59.19 | 61.33 | 62.76 |
| Cash conversion cycle | days | 84.07 | 101.21 | 116.97 | 87.11 | 80.51 | 93.56 | 94.30 | 87.84 | 73.87 | 79.21 | 73.34 | 77.15 | 67.77 | 82.96 | 82.06 | 77.06 | 65.43 | 81.45 | 83.52 | 79.13 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.96 + 80.15 – 76.03
= 84.07
The cash conversion cycle of Xylem Inc has fluctuated over the past eight quarters, ranging from a low of 80.51 days in Q4 2022 to a high of 116.97 days in Q2 2023. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle indicates that a company is able to efficiently manage its working capital and turn its investments into cash quickly.
In the recent quarters, there has been some volatility in Xylem Inc's cash conversion cycle, with Q2 2023 showing the highest cycle duration at 116.97 days. This suggests that the company may have faced challenges in managing its working capital efficiently during that period, which could have implications for its liquidity and overall financial health.
On the other hand, Q4 2022 demonstrated a shorter cycle of 80.51 days, indicating improved working capital management and potentially stronger cash flow generation during that quarter. It is essential for Xylem Inc to monitor and analyze the factors contributing to fluctuations in the cash conversion cycle to ensure optimal working capital management and cash flow performance in the future.
Peer comparison
Dec 31, 2023