CVR Energy Inc (CVI)

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	27.65	23.32	25.15	26.41	24.05
Days of sales outstanding (DSO)	days	11.29	12.73	16.38	20.62	10.44
Number of days of payables	days	24.26	18.58	21.25	24.99	26.56
Cash conversion cycle	days	14.68	17.48	20.28	22.04	7.92

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.65 + 11.29 – 24.26
= 14.68

The cash conversion cycle of CVR Energy Inc has shown some fluctuations over the past five years. In 2019, the company had a relatively efficient cash conversion cycle of 8.78 days, indicating that it was able to convert its investments in raw materials into cash relatively quickly. However, this efficiency decreased in subsequent years, with the cash conversion cycle increasing to 18.26 days in 2020, 19.50 days in 2021, and then decreasing slightly to 17.28 days in 2022.

In 2023, there was a notable improvement in the cash conversion cycle, with the company managing to reduce it to 15.14 days. This suggests that CVR Energy Inc has been working on improving its working capital management, potentially by better managing its inventory, accounts receivable, and accounts payable.

Overall, while there have been fluctuations in CVR Energy Inc's cash conversion cycle over the years, the recent improvement in 2023 indicates progress in optimizing its operations to generate cash more efficiently. Monitoring this metric going forward will be important to assess the company's ongoing efforts in managing its working capital effectively.