AdvanSix Inc (ASIX)

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	52.67	58.21	52.62	48.77	45.66	32.96	33.89	38.37	36.54	36.96	39.15	45.24	59.99	79.44	82.15	62.52	68.11	46.77	37.94	37.53
Days of sales outstanding (DSO)	days	39.91	34.41	33.04	31.79	34.78	37.34	46.58	45.74	38.90	39.15	42.27	44.59	42.97	35.50	26.46	34.94	30.02	29.40	32.90	29.11
Number of days of payables	days	64.41	58.55	51.26	46.14	57.79	55.15	59.35	47.09	54.04	56.37	54.44	55.38	63.37	82.08	67.87	73.55	81.68	63.11	52.86	50.22
Cash conversion cycle	days	28.17	34.07	34.40	34.42	22.65	15.15	21.12	37.02	21.39	19.74	26.98	34.46	39.59	32.86	40.74	23.91	16.45	13.06	17.97	16.41

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.67 + 39.91 – 64.41
= 28.17

To analyze AdvanSix Inc's cash conversion cycle, we can see that it has fluctuated over the past eight quarters. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is typically seen as more favorable as it indicates efficient management of working capital.

In Q4 2023, the cash conversion cycle was 27.11 days, which is lower compared to the three previous quarters. This suggests that the company was able to convert its investments into cash more efficiently during this period. However, it is important to note that the cash conversion cycle increased in Q3 and Q2 2023 compared to the previous quarters, indicating potential challenges in managing working capital during those periods.

Comparing Q4 2023 to the same quarter in the previous year, we see an increase from 21.93 days to 27.11 days. This increase may indicate a longer cash conversion cycle in the most recent quarter, potentially reflecting delays in converting investments into cash flows from sales.

Overall, the trend in AdvanSix Inc's cash conversion cycle shows some volatility and fluctuation over the past eight quarters. Analyzing the underlying factors contributing to these fluctuations could provide insights into the company's working capital management efficiency and potential areas for improvement.