Century Aluminum Company (CENX)
Cash conversion cycle
| Dec 31, 2024 | 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.94 | 81.63 | 83.79 | 81.37 | 76.62 | 79.65 | 57.19 | 49.69 | 46.98 | 53.65 | 66.55 | 72.32 | 65.00 | 66.96 | 64.83 | 64.72 | 58.11 | 58.64 | 65.34 | 62.90 |
| Days of sales outstanding (DSO) | days | 14.62 | 23.67 | 14.76 | 12.26 | 7.72 | 4.50 | 4.41 | 4.57 | 5.19 | 8.76 | 11.08 | 7.80 | 10.16 | 13.42 | 14.62 | 13.94 | 14.50 | 9.83 | 14.60 | 19.91 |
| Number of days of payables | days | 32.64 | 34.98 | 31.24 | 42.56 | 36.41 | 29.82 | 19.62 | 20.85 | 20.95 | 29.61 | 31.64 | 31.69 | 31.30 | 26.99 | 24.86 | 23.59 | 18.60 | 18.70 | 17.92 | 19.05 |
| Cash conversion cycle | days | 75.92 | 70.33 | 67.31 | 51.07 | 47.94 | 54.34 | 41.98 | 33.42 | 31.22 | 32.81 | 45.98 | 48.43 | 43.86 | 53.39 | 54.59 | 55.07 | 54.02 | 49.77 | 62.02 | 63.76 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.94 + 14.62 – 32.64
= 75.92
The cash conversion cycle of Century Aluminum Company has shown fluctuations over the period from December 31, 2019, to December 31, 2024. The cash conversion cycle represents the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital.
From December 31, 2019, to June 30, 2022, Century Aluminum Company managed to steadily decrease its cash conversion cycle, indicating improvements in its working capital management and overall efficiency. This trend suggests that the company was able to generate cash more quickly from its operations during this period.
However, from September 30, 2022, to June 30, 2024, there was an increase in the cash conversion cycle, which may be an indication of potential challenges in managing working capital efficiently. This could be due to various factors such as changes in the industry environment, inventory management issues, or changes in payment terms with suppliers and customers.
It is important for Century Aluminum Company to continuously monitor and manage its cash conversion cycle to ensure optimal working capital management and overall financial health. By identifying and addressing the root causes of any fluctuations in the cash conversion cycle, the company can enhance its liquidity position and operational efficiency in the long term.
Peer comparison
Dec 31, 2024