A.O. Smith (A.O. Smith) Cash Conversion Cycle : 43.88 (As of Dec. 2023)

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What is A.O. Smith Cash Conversion Cycle?

Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

A.O. Smith's Days Sales Outstanding for the three months ended in Dec. 2023 was 54.64.
A.O. Smith's Days Inventory for the three months ended in Dec. 2023 was 75.
A.O. Smith's Days Payable for the three months ended in Dec. 2023 was 85.76.
Therefore, A.O. Smith's Cash Conversion Cycle (CCC) for the three months ended in Dec. 2023 was 43.88.

A.O. Smith Cash Conversion Cycle Historical Data

The historical data trend for A.O. Smith's Cash Conversion Cycle can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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A.O. Smith Cash Conversion Cycle Chart

A.O. Smith Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Cash Conversion Cycle

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30.53

22.80

14.28

28.42

39.39

A.O. Smith Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Cash Conversion Cycle	Get a 7-Day Free Trial															41.90	43.12	49.23	51.02	43.88

Competitive Comparison of A.O. Smith's Cash Conversion Cycle

For the Specialty Industrial Machinery subindustry, A.O. Smith's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

A.O. Smith's Cash Conversion Cycle Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, A.O. Smith's Cash Conversion Cycle distribution charts can be found below:

* The bar in red indicates where A.O. Smith's Cash Conversion Cycle falls into.

A.O. Smith Cash Conversion Cycle Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

A.O. Smith's Cash Conversion Cycle for the fiscal year that ended in Dec. 2023 is calculated as

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	55.76	+	78.13	-	94.5
	=	39.39

A.O. Smith's Cash Conversion Cycle for the quarter that ended in Dec. 2023 is calculated as:

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	54.64	+	75	-	85.76
	=	43.88

A.O. Smith (NYSE:AOS) Cash Conversion Cycle Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.

Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.

A.O. Smith Cash Conversion Cycle Related Terms

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A.O. Smith (A.O. Smith) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » A.O. Smith Corp (NYSE:AOS) » Definitions » Cash Conversion Cycle

Comparable Companies

Traded in Other Exchanges

3SM:Germany 3SM:Germany

Address

11270 West Park Place, P. O. Box 245008, Suite 170, Milwaukee, WI, USA, 53224-9508

Website

https://www.aosmith.com

A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Supplementary products include water heating equipment, condensing and noncondensing boilers, and water system tanks. The company's two operating segments are by geographic region: North America (majority of total revenue) and the Rest of the World. A material portion of sales in North America derive from replacing existing products, and the company utilizes a wholesale distribution channel and multiple selling locations. The Rest of the World segment sells majorly in Asian countries and operates sales offices to expand distribution and market its product portfolio.

Executives

Mark D Smith	director
Idelle K Wolf	director
Robert J Heideman	officer: Senior Vice President Corp Tec	A. O. SMITH CORPORATE TECHNOLOGY CENTER, 12100 WEST PARK PLACE, MILWAUKEE WI 53224
Mark A Petrarca	officer: Vice President - H.R. & P.A.	A. O. SMITH CORPORATION, 11270 WEST PARK PLACE, MILWAUKEE WI 53224
James F Stern	officer: Exec VP, General Counsel & Sec	A. O. SMITH CORPORATION, 11270 WEST PARK PLACE, MILWAUKEE WI 53224
Ajita G Rajendra	officer: President, A. O. Smith Water P	A. O. SMITH WATER PRODUCTS COMPANY, 500 LINDAHL PARKWAY, ASHLAND CITY TN 37015
Kevin J. Wheeler	officer: Senior VP and President & GM	A. O. SMITH CORPORATION, 500 TENNESSEE WALTZ PARKWAY, ASHLAND CITY TN 37015
Benjamin A Otchere	officer: Vice President and Controller	A. O. SMITH CORPORATION, 11270 WEST PARK PLACE, MILWAUKEE WI 53224
Michael M Larsen	director	ILLINOIS TOOL WORKS INC., 155 HARLEM AVE., GLENVIEW IL 60025
Daniel L Kempken	officer: Vice President and Controller	A. O. SMITH CORPORATION, 11270 WEST PARK PLACE, MILWAUKEE WI 53224
Samuel M. Carver	officer: SVP - Global Operations	A. O. SMITH CORPORATION, 44 VANTAGE WAY, NASHVILLE TN 37228
Ronald D Brown	director	2090 FLORENCE AVENUE, CINCINNATI OH 45206
Parag Kulkarni	officer: SVP - Int'l; President India	A. O. SMITH INDIA WATER PRODUCTS PRIVATE, #300, PHASE II, KIADB INDUSTRIAL AREA, KARNATAKA K7 562112
Earl E. Exum	director	A. O. SMITH CORPORATION, 11270 WEST PARK PLACE, MILWAUKEE WI 53224
Stephen D. O'brien	officer: SVP; President, Lochinvar, LLC	LOCHINVAR, LLC, 300 MADDOX SIMPSON PARKWAY, LEBANON TN 37090