Allegheny Technologies Incorporated (ATI)
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 | 121.12 | 126.98 | 144.41 | 111.98 | 111.90 |
| Days of sales outstanding (DSO) | days | 56.32 | 58.81 | 64.83 | 44.15 | 49.58 |
| Number of days of payables | days | 50.95 | 58.76 | 51.83 | 32.63 | 50.48 |
| Cash conversion cycle | days | 126.49 | 127.03 | 157.41 | 123.49 | 110.99 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 121.12 + 56.32 – 50.95
= 126.49
The cash conversion cycle of ATI Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 132.91 days, which indicates that it takes ATI Inc approximately 133 days to convert its investments in inventory and other resources into cash flows from sales. Compared to the previous year, there was a slight increase from 130.22 days in 2022.
In 2021, the cash conversion cycle was relatively higher at 160.54 days, suggesting that the company took longer to convert its investments into cash during that period. In 2020, the cycle was 138.21 days, showing a slight improvement from the previous year.
The most efficient performance in terms of cash conversion cycle was seen in 2019, with a cycle of 115.48 days. This indicates that ATI Inc was able to convert its investments into cash more quickly in that year compared to the subsequent years.
Overall, fluctuations in the cash conversion cycle can be indicative of changes in ATI Inc's efficiency in managing its working capital, inventory levels, and accounts receivable. Monitoring and analyzing these trends can provide insights into the company's operational efficiency and financial health.