Cleveland-Cliffs Inc (CLF)
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 | 93.46 | 75.89 | 88.70 | 114.95 | 253.53 |
| Days of sales outstanding (DSO) | days | 29.98 | 30.53 | 31.12 | 38.51 | 81.33 |
| Number of days of payables | days | 36.84 | 35.72 | 37.79 | 45.93 | 104.31 |
| Cash conversion cycle | days | 86.60 | 70.71 | 82.02 | 107.53 | 230.55 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.46 + 29.98 – 36.84
= 86.60
The cash conversion cycle of Cleveland-Cliffs Inc has displayed a downward trend over the past five years, indicating improvements in the efficiency of its working capital management.
As of December 31, 2020, the company's cash conversion cycle was 230.55 days, reflecting a relatively lengthy period required to convert inputs into cash flows. However, by December 31, 2024, the cycle had decreased to 86.60 days, showcasing a significant enhancement in the company's ability to convert its resources into cash.
The gradual reduction in the cash conversion cycle suggests that Cleveland-Cliffs Inc has been successful in streamlining its operations, better managing its inventory levels, optimizing its accounts receivable collection, and efficiently paying its accounts payable. This improvement signifies increased liquidity, better cash flow management, and a more effective utilization of resources within the business.
Overall, the decreasing trend in the cash conversion cycle for Cleveland-Cliffs Inc indicates enhanced operational efficiency and financial performance over the years, contributing positively to the company's overall financial health and sustainability.
Peer comparison
Dec 31, 2024