Century Aluminum Company (CENX)
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 | 81.37 | 49.69 | 72.32 | 64.72 | 62.90 |
| Days of sales outstanding (DSO) | days | 15.45 | 4.57 | 7.80 | 13.94 | 19.91 |
| Number of days of payables | days | 42.56 | 20.85 | 31.69 | 23.59 | 19.05 |
| Cash conversion cycle | days | 54.26 | 33.42 | 48.43 | 55.07 | 63.76 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.37 + 15.45 – 42.56
= 54.26
The cash conversion cycle of Century Aluminum Company has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 54.26 days from 33.42 days in 2022, indicating that the company took longer to convert its investments in raw materials into cash from sales. This could be a result of slower inventory turnover or slower collection of accounts receivable.
Comparing to 2021, the cash conversion cycle decreased from 48.43 days to 33.42 days in 2022, demonstrating improved efficiency in managing working capital. However, the cycle was longer in 2022 compared to 2021, potentially pointing towards challenges in managing cash flows or inventory levels.
In 2020, the cash conversion cycle was 55.07 days, which was higher than the following year, suggesting that the company was able to operate more efficiently in 2021. Furthermore, in 2019, the cash conversion cycle was at its highest level of 63.76 days, indicating potential inefficiencies in working capital management.
Overall, Century Aluminum Company needs to focus on optimizing its cash conversion cycle to ensure better management of working capital and improve cash flow efficiency in the future.
Peer comparison
Dec 31, 2023