Zurn Elkay Water Solutions Corporation (ZWS)
Cash conversion cycle
| 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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 77.00 | 78.69 | 76.07 | 77.69 | 80.36 | 97.45 | 113.92 | 148.13 | 86.63 | 65.00 | 44.56 | 78.28 | 76.68 | 101.39 | 106.32 | 103.35 | 90.76 | 99.26 | 97.94 | 99.05 |
| Days of sales outstanding (DSO) | days | 58.26 | 54.89 | 54.18 | 57.79 | 59.12 | 60.38 | 67.76 | 93.96 | 59.74 | 46.84 | 35.25 | 59.37 | 61.66 | 56.19 | 53.40 | 49.38 | 59.07 | 51.55 | 52.77 | 53.98 |
| Number of days of payables | days | 26.17 | 19.28 | 15.46 | 16.59 | 17.08 | 23.45 | 36.32 | 53.49 | 44.88 | 32.95 | 25.38 | 42.60 | 40.67 | 52.09 | 46.93 | 47.44 | 53.06 | 50.69 | 45.11 | 50.72 |
| Cash conversion cycle | days | 109.09 | 114.31 | 114.80 | 118.89 | 122.40 | 134.38 | 145.36 | 188.61 | 101.49 | 78.89 | 54.42 | 95.05 | 97.68 | 105.49 | 112.80 | 105.29 | 96.77 | 100.11 | 105.61 | 102.30 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.00 + 58.26 – 26.17
= 109.09
The cash conversion cycle of Zurn Elkay Water Solutions Corporation has shown variations over the periods analyzed. The cycle measures the time it takes for the company to convert its investments in inventory into cash from sales.
From September 2019 to March 2020, the company's cash conversion cycle decreased from 105.61 days to 96.77 days, indicating an improvement in efficiency in managing its inventory and accounts receivable. However, there was a slight increase in the cycle to 105.29 days by June 2020.
Subsequently, there was a significant improvement as the cash conversion cycle reduced to 54.42 days by March 2022, reflecting a more efficient utilization of working capital. This trend continued with further reductions to 78.89 days by June 2022 and 101.49 days by September 2022.
However, from December 2022 to September 2023, there was a notable increase in the cash conversion cycle, reaching 145.36 days by March 2023 and peaking at 188.61 days by September 2023. This increase suggests potential challenges in managing inventory levels and collections from customers during this period.
The company made progress in reducing the cycle to 109.09 days by September 2024, indicating efforts to streamline operations and improve cash flow management. Analyzing the components of the cash conversion cycle, further investigation into inventory turnover, accounts receivable collection efficiency, and accounts payable management could provide insights into the company's overall working capital performance.
Peer comparison
Sep 30, 2024