Century Aluminum Company (CENX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.94 | 81.37 | 49.69 | 72.32 | 64.72 |
| Days of sales outstanding (DSO) | days | 14.62 | 15.45 | 4.57 | 7.80 | 13.94 |
| Number of days of payables | days | 32.64 | 42.56 | 20.85 | 31.69 | 23.59 |
| Cash conversion cycle | days | 75.92 | 54.26 | 33.42 | 48.43 | 55.07 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.94 + 14.62 – 32.64
= 75.92
Century Aluminum Company's cash conversion cycle has shown fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle stood at 55.07 days, indicating that the company took approximately 55 days to convert its investments in raw materials and other resources into cash flows from sales. By December 31, 2021, the cycle improved slightly to 48.43 days, suggesting more efficient management of cash flows and working capital.
The trend continued positively into December 31, 2022, with a significant decrease in the cash conversion cycle to 33.42 days, signaling an even more effective cash management process within the company. However, by December 31, 2023, the cycle increased to 54.26 days, indicating potential challenges in managing working capital effectively.
The most notable increase in the cash conversion cycle occurred by December 31, 2024, when it reached 75.92 days, the highest in the five-year period. This substantial increase may raise concerns about the company's liquidity and operational efficiency, suggesting that Century Aluminum Company may be experiencing challenges in converting its resources into cash.
Overall, Century Aluminum Company's cash conversion cycle has shown variability over the years, with improvements in some periods and deteriorations in others. It is essential for the company to closely monitor its cash conversion cycle to ensure efficient working capital management and sustainable financial performance.
Peer comparison
Dec 31, 2024