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.