Albemarle Corp (ALB)
Cash conversion cycle
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.56 | 177.74 | 230.92 | 238.37 | 178.48 | 179.45 | 157.60 | 151.46 | 125.11 | 119.04 | 121.67 | 113.63 | 128.32 | 139.00 | 138.00 | 136.64 | 120.38 | 128.52 | 134.67 | 126.05 |
| Days of sales outstanding (DSO) | days | 87.65 | 63.08 | 66.90 | 69.25 | 79.30 | 76.40 | 91.55 | 73.47 | 80.70 | 63.58 | 58.04 | 67.29 | 79.69 | 65.03 | 64.30 | 61.85 | 81.81 | 75.06 | 77.99 | 71.22 |
| Number of days of payables | days | — | — | — | 131.76 | 131.85 | 183.63 | 141.45 | 126.35 | 94.07 | 87.16 | 88.88 | 81.61 | 82.65 | 78.16 | 84.81 | 91.75 | 89.88 | 84.41 | 92.45 | 80.42 |
| Cash conversion cycle | days | 181.22 | 240.82 | 297.81 | 175.86 | 125.94 | 72.23 | 107.70 | 98.58 | 111.74 | 95.46 | 90.83 | 99.31 | 125.36 | 125.87 | 117.49 | 106.75 | 112.31 | 119.17 | 120.21 | 116.85 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.56 + 87.65 – —
= 181.22
The cash conversion cycle of Albemarle Corp. has shown fluctuations over the past eight quarters, indicating variations in the company's efficiency in managing its working capital. In Q4 2023, the cash conversion cycle decreased to 72.82 days from 104.69 days in Q3 2023. This suggests an improvement in the company's ability to convert its inventory into cash during this period.
However, the cash conversion cycle in Q4 2023 was still higher compared to the same quarter in the previous year (Q4 2022) when it was 74.30 days. The company managed its working capital more effectively in Q4 2022 than in Q4 2023.
Overall, Albemarle Corp. experienced fluctuations in its cash conversion cycle over the analyzed quarters, indicating the company's ongoing efforts to optimize its working capital management. It is crucial for the company to monitor these fluctuations closely and implement strategies to improve its cash conversion cycle consistently to enhance its operational efficiency and profitability.
Peer comparison
Dec 31, 2023