Zurn Elkay Water Solutions Corporation (ZWS)
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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.95 | 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 |
| Days of sales outstanding (DSO) | days | 52.88 | 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 |
| Number of days of payables | days | 20.24 | 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 |
| Cash conversion cycle | days | 109.58 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 76.95 + 52.88 – 20.24
= 109.58
The cash conversion cycle of Zurn Elkay Water Solutions Corporation has shown fluctuations over the years based on the provided data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales. A shorter cash conversion cycle is typically favorable as it indicates that the company is able to generate cash quickly from its operating activities.
Analyzing the data provided:
- In December 2021, the cash conversion cycle decreased significantly to 54.42 days, indicating an improvement in the company's efficiency in managing its working capital.
- However, by September 2022, the cash conversion cycle increased substantially to 188.61 days, which may raise concerns about the company's ability to efficiently manage its working capital and convert inventory into cash.
- The cash conversion cycle gradually decreased until March 2024, which could suggest improvements in inventory management and receivables collection.
- The cycle remained relatively stable from September 2024 to December 2024, showing consistency in the company's working capital management.
Overall, fluctuations in the cash conversion cycle of Zurn Elkay Water Solutions Corporation indicate varying levels of efficiency in managing cash flows, inventory, and receivables. It is important for the company to focus on optimizing its working capital management to ensure healthy cash flows and overall financial performance.
Peer comparison
Dec 31, 2024