According to dailyfinance, MH component supplier Drew Industries is quick at turning cash outflows into cash inflows, based on a formula that may be just as important as income in determining the financial health of a company. The cash conversion cycle (CCC) calculates days inventory outstanding to days sales outstanding, and then subtracts days payable outstanding to arrive at a number that is then compared to past performance of the company. As in golf, the lower the score the better. The 12-month trailing number for Drew is 55.7, 8.1 points better than its average of 63.8 days five-years ago. When measuring the numbers on a quarterly basis, Drew’s CCC trend also looks good: At 46.3 days, it is 8.8 days better than the average of the previous eight quarters. The formula is a good rule-of-thumb when checking out a stock. As MHProNews knows, Drew Industries, through its subsidiaries Kinro, Inc. and Lippert Components, Inc. provides numerous components to the manufactured housing and recreational vehicle industries.
(Image credit: Drew Industries, Inc.)