Arch Resources Inc (ARCH)
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 | 33.78 | 30.70 | 31.40 | 27.81 | 22.29 |
| Days of sales outstanding (DSO) | days | 31.94 | 23.48 | 55.89 | 27.97 | 27.04 |
| Number of days of payables | days | 28.35 | 29.16 | 26.44 | 22.90 | 22.66 |
| Cash conversion cycle | days | 37.37 | 25.02 | 60.85 | 32.89 | 26.67 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 33.78 + 31.94 – 28.35
= 37.37
The cash conversion cycle of Arch Resources Inc has demonstrated fluctuations over the past five years. In 2023, the company's cash conversion cycle was 37.37 days, indicating that it took approximately 37 days for the company to convert its investments in inventory into cash receipts from customers. This was higher compared to the previous year, 2022, where the cycle was 25.02 days, reflecting a quicker conversion cycle.
In 2021, the cash conversion cycle increased significantly to 60.85 days, suggesting a delay in the company's ability to convert inventory investments into cash receipts. The cycle improved in 2022 to 32.89 days and further decreased in 2019 to 26.67 days, indicating more efficient operations in those years.
Overall, the trend of Arch Resources Inc's cash conversion cycle shows fluctuations, with periods of slower and faster conversion cycles. It is important for the company to monitor and manage its inventory levels, accounts receivable collection, and accounts payable payment efficiently to optimize its cash conversion cycle and improve working capital management.
Peer comparison
Dec 31, 2023