Archer-Daniels-Midland Company (ADM)
Cash conversion cycle
| Sep 30, 2024 | Jun 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 | 48.51 | 46.39 | 50.18 | 50.50 | 45.85 | 47.04 | 57.22 | 57.36 | 53.13 | 60.50 | 75.43 | 66.68 | 54.76 | 60.10 | 73.68 | 71.37 | 54.73 | 46.39 | 53.58 | 55.31 |
| Days of sales outstanding (DSO) | days | 15.81 | 18.02 | 16.63 | 16.44 | 16.74 | 15.02 | 16.00 | 17.70 | 17.30 | 20.64 | 17.17 | 14.31 | 17.29 | 16.94 | 17.48 | 16.05 | 15.23 | 14.66 | 13.83 | 12.97 |
| Number of days of payables | days | 22.17 | 22.37 | 24.15 | 26.66 | 21.45 | 20.07 | 24.29 | 30.30 | 26.17 | 23.39 | 26.76 | 29.42 | 22.64 | 18.07 | 23.15 | 27.26 | 20.91 | 17.62 | 20.87 | 22.60 |
| Cash conversion cycle | days | 42.16 | 42.04 | 42.66 | 40.28 | 41.13 | 41.99 | 48.93 | 44.77 | 44.26 | 57.74 | 65.84 | 51.58 | 49.42 | 58.97 | 68.00 | 60.15 | 49.05 | 43.43 | 46.54 | 45.69 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.51 + 15.81 – 22.17
= 42.16
Archer-Daniels-Midland Company's cash conversion cycle has shown a fluctuating trend over the past quarters. The cash conversion cycle is a measure of how efficiently a company is able to convert its resources into cash flow. In the most recent quarter, ending on September 30, 2024, the company's cash conversion cycle stood at 42.16 days.
The cash conversion cycle of 42.16 days suggests that on average, it takes Archer-Daniels-Midland approximately 42 days to convert its investments in inventory into cash receipts from customers. This metric indicates that the company is fairly efficient in managing its inventory and collecting payments from its sales.
Over the preceding quarters, the cash conversion cycle has ranged from a high of 68.00 days in March 31, 2021 to a low of 40.28 days in December 31, 2023. This variability could be attributed to seasonality, changes in demand, or shifts in the company's operating efficiency.
It is worth noting that a lower cash conversion cycle is generally preferred as it indicates that the company is able to generate cash quickly, while a higher cycle may suggest inefficiencies in managing working capital. Therefore, Archer-Daniels-Midland should continue to focus on optimizing its cash conversion cycle to improve its liquidity and operational efficiency.
Peer comparison
Sep 30, 2024