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