CF Industries Holdings Inc (CF)
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 | 26.71 | 32.49 | 35.88 | 31.52 | 37.50 |
| Days of sales outstanding (DSO) | days | 27.80 | 18.99 | 27.75 | 23.45 | 19.24 |
| Number of days of payables | days | 10.18 | 4.32 | 9.67 | 9.34 | 8.33 |
| Cash conversion cycle | days | 44.32 | 47.16 | 53.95 | 45.64 | 48.41 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.71 + 27.80 – 10.18
= 44.32
The cash conversion cycle of CF Industries Holdings Inc has shown fluctuating trends over the past five years. In 2023, the company's cash conversion cycle decreased to 44.32 days from the previous year's 47.16 days. This improvement suggests that CF Industries Holdings Inc is managing its working capital more efficiently by reducing the time it takes to convert its investment in inventory and receivables into cash.
Comparing the latest figure to historical data, it is evident that the cash conversion cycle in 2023 is lower than in 2021 and 2019, indicating a positive trend in the company's working capital management. However, the company's performance in 2023 is still higher than in 2020 when the cash conversion cycle was 45.64 days. This suggests that there may be further opportunities for CF Industries Holdings Inc to streamline its operations and enhance its cash conversion efficiency.
Overall, the decreasing trend in CF Industries Holdings Inc's cash conversion cycle over the past year reflects improved working capital management, which can lead to enhanced liquidity and profitability for the company. continued focus on optimizing the cash conversion cycle may further strengthen the company's financial position in the future.
Peer comparison
Dec 31, 2023