Element Solutions Inc (ESI)
Cash conversion cycle
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.68 | 63.23 | 74.16 | 88.33 | 83.31 | 77.12 | 83.13 | 83.39 | 77.01 | 66.45 | 68.51 | 75.80 | 76.30 | 69.60 | 86.00 | 82.20 | 79.22 | 69.43 | 76.04 | 76.77 |
| Days of sales outstanding (DSO) | days | 67.04 | 65.31 | 72.04 | 74.33 | 71.79 | 72.24 | 70.31 | 70.15 | 68.90 | 65.26 | 65.08 | 73.43 | 78.02 | 74.86 | 80.84 | 76.37 | 79.00 | 79.43 | 75.40 | 64.28 |
| Number of days of payables | days | 36.95 | 31.15 | 32.99 | 38.50 | 34.70 | 36.28 | 37.03 | 36.11 | 36.16 | 16.55 | 35.02 | 39.42 | 42.35 | 35.10 | 44.85 | 41.04 | 39.87 | 32.68 | 37.25 | 29.06 |
| Cash conversion cycle | days | 98.77 | 97.38 | 113.21 | 124.16 | 120.40 | 113.09 | 116.40 | 117.44 | 109.75 | 115.16 | 98.57 | 109.81 | 111.97 | 109.36 | 122.00 | 117.53 | 118.35 | 116.18 | 114.19 | 111.99 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.68 + 67.04 – 36.95
= 98.77
The analysis of Element Solutions Inc.’s cash conversion cycle (CCC) over the period from June 2020 to March 2025 reveals fluctuations that indicate variability in the company's working capital management efficiency.
Initially, the CCC was approximately 112 days as of June 2020, gradually increasing to a peak of around 122 days in September 2021. This upward trend suggests that the company was experiencing longer periods of accounts receivable collection or inventory holdings relative to accounts payable, potentially indicating inefficiencies in working capital utilization during this period.
From the latter half of 2021 onwards, a notable decline in the CCC is observed, reaching a low of approximately 98.57 days in September 2022. This reduction indicates an improvement in cash flow management, possibly driven by faster receivables collection, shorter inventory turnover periods, or extended payable periods. The period from September 2022 to December 2023 shows some fluctuations, with the CCC rising again to over 117 days in June 2023, before declining to approximately 97.38 days in December 2024. These oscillations may reflect operational adjustments or changes in credit and inventory policies.
In the most recent quarter, ending March 2025, the CCC stands at roughly 98 days, aligning with intermediate values seen earlier. Overall, the data demonstrates a trend of initial increasing CCC, peaking around September 2021, followed by a general decline with intermittent fluctuations. This pattern suggests that the company's working capital management has seen periods of both efficiency and challenge, underscoring the importance of ongoing focus on receivables, inventory, and payable cycle management to optimize cash flow and liquidity.
Peer comparison
Mar 31, 2025