CVR Energy Inc (CVI)

Cash conversion cycle

		Dec 31, 2024	Sep 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	24.31	23.65	28.27	27.65	26.75	21.62	23.23	23.32	24.52	30.91	32.95	25.15	24.82	26.52	31.01	26.40	22.23	19.29	13.73	24.05
Days of sales outstanding (DSO)	days	14.24	12.18	10.47	11.29	11.86	11.06	11.14	12.73	11.31	16.04	15.81	16.38	14.02	15.91	19.35	20.62	11.09	10.81	9.23	10.44
Number of days of payables	days	26.05	22.03	25.91	24.26	24.82	19.23	19.53	18.58	21.61	28.51	34.20	21.26	24.05	28.36	34.21	24.98	20.22	18.07	22.39	26.56
Cash conversion cycle	days	12.49	13.80	12.82	14.68	13.79	13.45	14.84	17.48	14.22	18.44	14.55	20.28	14.79	14.07	16.16	22.04	13.09	12.04	0.58	7.92

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.31 + 14.24 – 26.05
= 12.49

The cash conversion cycle of CVR Energy Inc provides insights into the efficiency of its working capital management. Looking at the historical trend, we observe fluctuations in the cycle duration over time.

Initially, the company exhibited a relatively low cash conversion cycle of around 7 to 13 days between December 2019 and September 2021. This indicates that CVR Energy was efficient in converting its inventory into cash, collecting receivables, and managing payables during this period.

However, from December 2021 to March 2024, we see an increase in the cash conversion cycle to the range of 14 to 22 days. This upsurge could suggest a less efficient working capital management process during this period, leading to a prolonged time to convert inventory into sales and subsequently into cash.

It is noteworthy that the company managed to reduce the cash conversion cycle in the latter half of 2024, with the cycle duration dropping to around 12 to 14 days. This improvement indicates a potential enhancement in CVR Energy's working capital efficiency during this period.

Overall, analyzing the cash conversion cycle reveals the dynamic nature of CVR Energy Inc's working capital management practices over time, highlighting both periods of efficiency and areas for potential optimization in managing its cash flows.