Xylem Inc (XYL)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.80 | 75.49 | 75.45 | 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 |
| Days of sales outstanding (DSO) | days | 71.53 | 74.79 | 75.35 | 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 |
| Number of days of payables | days | 68.48 | 64.35 | 68.85 | 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 |
| Cash conversion cycle | days | 70.85 | 85.93 | 81.96 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.80 + 71.53 – 68.48
= 70.85
The cash conversion cycle of Xylem Inc has shown some fluctuations over the period analyzed. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates better liquidity management and efficiency in generating cash.
From December 31, 2019, to June 30, 2021, Xylem Inc experienced a relatively stable cash conversion cycle, fluctuating between 65.43 days and 82.06 days. However, from March 31, 2021, to June 30, 2022, the cycle increased significantly, reaching a peak of 94.30 days. This prolonged cycle suggests that the company may have faced challenges in managing its working capital efficiently during this period.
Subsequently, from September 30, 2022, to March 31, 2024, Xylem Inc was able to improve its cash conversion cycle, with a decrease from 93.56 days to 81.96 days. This indicates a potential enhancement in the company's ability to convert its investments into cash.
However, by June 30, 2024, the cash conversion cycle started to increase again, reaching 116.97 days. This substantial rise in the cycle could imply issues in managing inventory, collecting receivables, or paying suppliers promptly.
Overall, Xylem Inc should focus on monitoring and optimizing its cash conversion cycle to ensure effective management of working capital, improve cash flow, and enhance overall financial performance.
Peer comparison
Dec 31, 2024