The Andersons Inc (ANDE)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.46 | 30.41 | 37.98 | 55.10 | 61.31 |
| Days of sales outstanding (DSO) | days | 24.79 | 18.87 | 26.57 | 24.46 | 30.12 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 69.25 | 49.28 | 64.55 | 79.56 | 91.43 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.46 + 24.79 – —
= 69.25
The Cash Conversion Cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. A shorter CCC indicates more efficient operations.
For The Andersons Inc:
- As of December 31, 2020, the CCC was 91.43 days, indicating that the company took around 91 days to convert its investments into cash flow.
- By December 31, 2021, the CCC decreased to 79.56 days, suggesting improved efficiency in managing inventory and collecting receivables.
- The CCC further declined to 64.55 days by December 31, 2022, reflecting continued efficiency gains in converting assets into cash.
- However, by December 31, 2023, the CCC decreased more significantly to 49.28 days, indicating a strong performance in managing the cash conversion process.
- Unexpectedly, by December 31, 2024, the CCC increased to 69.25 days, possibly pointing to changes in inventory management or payment terms with suppliers and customers.
Overall, The Andersons Inc has shown fluctuations in its CCC over the years, with both improvements and slight setbacks. It would be essential for the company to monitor and manage its cash conversion process effectively to sustain efficient operations and financial performance.
Peer comparison
Dec 31, 2024