FMC Corporation (FMC)

Cash conversion cycle

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	176.20	195.76	187.62	170.52	154.47	178.81	186.09	195.60	193.32	194.26	191.67	177.18	154.39	163.43	163.33	151.09	146.94	170.95	172.60	169.58
Days of sales outstanding (DSO)	days	220.48	188.65	189.25	201.34	180.13	169.69	194.91	201.69	187.31	191.17	205.26	201.57	183.23	166.48	185.18	192.37	176.66	147.42	178.91	191.92
Number of days of payables	days	61.55	64.89	93.50	105.55	117.12	107.99	131.30	130.02	144.17	147.51	158.76	151.72	133.41	107.10	120.82	119.20	130.05	97.67	117.58	131.91
Cash conversion cycle	days	335.14	319.52	283.37	266.32	217.49	240.51	249.69	267.27	236.45	237.92	238.18	227.03	204.21	222.82	227.69	224.26	193.55	220.70	233.93	229.59

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 176.20 + 220.48 – 61.55
= 335.14

The cash conversion cycle of FMC Corp has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 374.13 days, indicating that it took the company approximately 374 days to convert its investments in materials and labor into cash from sales. This is an increase from the previous quarter, Q3 2023, where the cash conversion cycle was 357.84 days.

Looking further back, the cash conversion cycle reached its lowest point in Q4 2022 at 222.57 days but has been trending upwards since then. This suggests that FMC Corp may be experiencing inefficiencies in its inventory management, accounts receivable collection, or accounts payable processes, leading to a longer cash conversion cycle.

Overall, FMC Corp should aim to streamline its operations and improve its working capital management to reduce the cash conversion cycle and enhance its liquidity position.