The Andersons Inc (ANDE)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.41 | 37.98 | 55.10 | 61.31 | 56.65 |
| Days of sales outstanding (DSO) | days | 18.87 | 26.57 | 24.46 | 30.12 | 24.95 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 49.28 | 64.55 | 79.56 | 91.43 | 81.59 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.41 + 18.87 – —
= 49.28
Andersons Inc.'s cash conversion cycle has shown a fluctuating trend over the past five years. The company's cash conversion cycle decreased from 79.79 days in 2019 to 49.28 days in 2023, indicating an improvement in its efficiency in managing cash flows.
In 2020, there was a significant increase in the cash conversion cycle to 90.18 days, which suggests potential challenges in managing working capital and turning inventory into cash. However, the company managed to reduce this cycle in subsequent years, reaching its lowest level in 2023.
The decreasing trend in the cash conversion cycle indicates that Andersons Inc. has been able to streamline its operations, improve inventory turnover, and collect accounts receivable more efficiently. This efficiency could potentially lead to improved cash flows and overall financial performance for the company.
Overall, the company's ability to reduce its cash conversion cycle over the years reflects positive progress in managing its working capital effectively and optimizing cash flow operations.
Peer comparison
Dec 31, 2023