Chemours Co (CC)

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	79.45	82.80	65.97	74.46	72.10
Days of sales outstanding (DSO)	days	38.27	34.42	42.81	39.37	46.26
Number of days of payables	days	68.11	72.72	69.75	66.93	61.68
Cash conversion cycle	days	49.61	44.51	39.03	46.91	56.68

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.45 + 38.27 – 68.11
= 49.61

The cash conversion cycle, which measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, for Chemours Co has shown varying trends over the past five years. In 2023, the cash conversion cycle increased to 49.61 days compared to the previous year, indicating that it took the company longer to convert its resources into cash. This could potentially be a signal of inefficiencies in managing inventory, collecting receivables, or paying liabilities.

Conversely, in 2021, the company experienced a significant improvement in its cash conversion cycle, which decreased to 39.03 days. This suggests that Chemours Co became more efficient in managing its working capital during that period, converting inventory into sales and collecting cash more quickly.

Comparing the cash conversion cycle of Chemours Co to that of 2019, there has been a noticeable reduction from 56.68 days to 49.61 days in 2023. Overall, while there have been fluctuations in the cash conversion cycle over the years, it is essential for the company to monitor and manage its working capital effectively to ensure optimal operational efficiency and cash flow management.