Avient Corp (AVNT)

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	41.50	41.79	24.75	38.38	34.81
Days of sales outstanding (DSO)	days	48.24	42.13	49.42	59.53	42.97
Number of days of payables	days	51.70	50.95	34.76	55.27	38.39
Cash conversion cycle	days	38.04	32.97	39.41	42.63	39.39

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 41.50 + 48.24 – 51.70
= 38.04

The cash conversion cycle of Avient Corp has shown a decreasing trend over the past five years, indicating an improvement in the efficiency of the company's working capital management. In the most recent year, the cash conversion cycle was 32.61 days, which is the lowest among the five years analyzed. This suggests that Avient Corp has been able to shorten the time it takes to convert its investments in inventory and accounts receivable into cash.

A shorter cash conversion cycle typically signifies that the company is able to generate cash quickly from its operational activities, which is a positive indicator of liquidity and efficiency. Avient Corp's ability to reduce its cash conversion cycle over the years may be attributed to more effective inventory management, faster collection of accounts receivable, or better negotiation of payment terms with suppliers.

Overall, the decreasing trend in the cash conversion cycle for Avient Corp indicates an improvement in the company's working capital management and efficiency in converting its resources into cash. This trend suggests that Avient Corp has been successful in optimizing its cash flows and operating cycle to support its financial health and operational performance.