AdvanSix Inc (ASIX)
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 | 52.67 | 45.66 | 36.54 | 59.99 | 50.18 |
Days of sales outstanding (DSO) | days | 39.93 | 34.79 | 38.92 | 43.11 | 30.17 |
Number of days of payables | days | 64.41 | 57.79 | 54.04 | 63.37 | 60.18 |
Cash conversion cycle | days | 28.19 | 22.66 | 21.41 | 39.73 | 20.17 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.67 + 39.93 – 64.41
= 28.19
The cash conversion cycle of AdvanSix Inc has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 27.11 days from 21.93 days in 2022. This indicates that it took AdvanSix Inc longer to convert its investments in inventory and accounts receivable into cash in 2023 compared to the previous year.
Looking back further, we see a notable decrease in the cash conversion cycle from 39.21 days in 2020 to 19.26 days in 2019. This significant improvement suggests that the company was able to manage its inventory and accounts receivable more efficiently to generate cash during that period.
Overall, fluctuations in the cash conversion cycle of AdvanSix Inc may be influenced by factors such as inventory management practices, sales terms, and collection efficiency. It is important for the company to continually monitor and optimize its cash conversion cycle to improve working capital management and enhance overall financial performance.
Peer comparison
Dec 31, 2023