The Andersons Inc (ANDE)
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 | 30.41 | 23.18 | 22.47 | 34.28 | 37.98 | 36.13 | 40.61 | 53.14 | 55.10 | 34.35 | 33.95 | 55.91 | 61.47 | 38.75 | 31.59 | 49.78 | 55.83 | 40.84 | 51.11 | 92.77 |
| Days of sales outstanding (DSO) | days | 18.87 | 18.38 | 22.39 | 24.05 | 26.57 | 22.27 | 27.81 | 27.87 | 24.46 | 24.11 | 26.18 | 29.37 | 30.12 | 26.33 | 26.35 | 24.89 | 24.44 | 28.11 | 46.05 | 52.54 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 49.28 | 41.56 | 44.86 | 58.33 | 64.55 | 58.40 | 68.42 | 81.01 | 79.56 | 58.46 | 60.13 | 85.28 | 91.59 | 65.08 | 57.94 | 74.67 | 80.27 | 68.94 | 97.17 | 145.31 |
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 exhibited fluctuating trends over the past eight quarters. The cycle refers to the number of days it takes for the company to convert its investments in inventory and other resources into cash inflows from sales. A lower cash conversion cycle indicates that the company is efficient in managing its working capital.
In Q1 2022, Andersons Inc. had a relatively long cash conversion cycle of 80.74 days, suggesting delays in converting investments into cash. However, by Q3 2022, the cycle decreased to 58.38 days, indicating improved efficiency in working capital management.
The trend continued positively into 2023, with Q3 and Q2 showing further decreases to 41.56 days and 44.86 days, respectively. This improvement reflected the company's ability to optimize inventory turnover and collect receivables more quickly, leading to a faster cash conversion cycle.
However, in Q4 2023, the cycle increased to 49.28 days, suggesting a slight deterioration in efficiency compared to the previous quarter. Despite this increase, the company's cash conversion cycle remains better than the levels observed in 2022.
Overall, Andersons Inc. should continue to focus on maintaining a shorter cash conversion cycle to enhance its liquidity position and operational efficiency. Monitoring this metric closely can help the company identify areas for improvement in working capital management and strengthen its financial performance.
Peer comparison
Dec 31, 2023