Avantor Inc (AVTR)

Cash conversion cycle

		Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	64.18	64.92	65.66	67.01	69.21	68.68	67.91	66.21	67.32	65.79	65.18	63.75	65.13	63.52	62.59	64.23	66.03	60.61
Days of sales outstanding (DSO)	days	60.37	60.05	60.26	59.64	61.85	63.49	59.20	58.95	60.95	65.03	60.39	59.48	65.78	65.85	63.56	61.77	59.59	62.51
Number of days of payables	days	53.03	45.93	49.63	51.68	53.37	58.17	56.37	56.25	58.28	60.08	56.44	52.78	58.50	57.70	57.45	55.03	51.99	53.97
Cash conversion cycle	days	71.52	79.05	76.29	74.97	77.69	74.00	70.74	68.90	69.99	70.75	69.13	70.45	72.41	71.67	68.69	70.97	73.62	69.15

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.18 + 60.37 – 53.03
= 71.52

The cash conversion cycle for Avantor Inc has shown some fluctuations over the past several quarters. The trend indicates that the company's cash conversion cycle has generally ranged between 68 to 79 days.

A lower cash conversion cycle is indicative of more efficient management of working capital, as it means that the company is able to convert its inventory into cash more quickly, thereby reducing the amount of time funds are tied up in the operating cycle.

Avantor Inc's cash conversion cycle has shown some improvement in recent quarters, with a decrease in days compared to the earlier periods. However, there have been some fluctuations within this period, suggesting that the company may still face challenges in optimizing its working capital management.

Overall, monitoring and potentially improving the cash conversion cycle can help Avantor Inc to better manage its liquidity, working capital, and overall financial efficiency.