Avient Corp (AVNT)

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	41.50	39.99	40.51	37.34	33.90	37.29	38.60	37.44	24.75	40.44	37.05	37.25	38.38	52.55	45.95	45.47	40.54	44.08	51.95	55.01
Days of sales outstanding (DSO)	days	48.24	44.09	50.24	42.39	34.73	40.63	55.52	56.72	49.42	56.31	60.56	64.61	59.17	65.90	42.89	47.51	38.61	40.84	49.79	50.31
Number of days of payables	days	51.70	44.56	48.38	44.99	41.33	37.89	49.54	50.58	34.76	47.26	51.61	55.26	55.28	68.11	50.01	55.28	44.71	45.28	58.52	59.75
Cash conversion cycle	days	38.04	39.53	42.37	34.74	27.30	40.02	44.58	43.57	39.41	49.49	46.00	46.61	42.27	50.34	38.83	37.69	34.44	39.63	43.22	45.57

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 exhibited some fluctuations over the past eight quarters. In Q3 2023, the company had a relatively long cash conversion cycle of 57.47 days, indicating that it took a considerable amount of time for Avient Corp to convert its investments in inventory and other resources into cash inflows from sales. Subsequently, in Q4 2023, there was a significant improvement as the cash conversion cycle shortened to 32.61 days, suggesting a more efficient management of working capital.

Looking at the trend over the past two years, the company experienced a peak in Q2 2023 with a cash conversion cycle of 59.82 days, which is indicative of potential inefficiencies in the cash conversion process during that period. However, this was followed by a notable decrease in Q4 2022 to 35.48 days, reflecting an improvement in Avient Corp's ability to generate cash from its operational activities.

Overall, fluctuations in the cash conversion cycle can be influenced by various factors such as inventory management, accounts receivable collection, and accounts payable practices. It is essential for Avient Corp to continuously monitor and manage its cash conversion cycle to ensure optimal utilization of resources and liquidity efficiency.