Howmet Aerospace Inc (HWM)
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 | 119.01 | 120.45 | 121.48 | 123.00 | 124.82 | 129.06 | 128.49 | 126.03 | 120.98 | 127.82 | 131.61 | 125.53 | 90.76 | 67.85 | 56.97 | 68.99 | 54.12 | 122.87 | 204.73 | 789.22 |
| Days of sales outstanding (DSO) | days | 39.26 | 42.92 | 41.03 | 42.88 | 36.08 | 42.08 | 40.73 | 41.09 | 33.58 | 37.04 | 33.44 | 34.89 | 33.46 | 18.07 | 17.20 | 40.70 | 37.32 | 45.37 | 46.05 | 46.98 |
| Number of days of payables | days | 66.22 | 61.60 | 62.40 | 64.90 | 74.63 | 65.01 | 66.92 | 66.03 | 63.16 | 58.15 | 57.13 | 51.49 | 36.54 | 22.21 | 21.52 | 49.40 | 32.87 | 95.60 | 164.59 | 662.62 |
| Cash conversion cycle | days | 92.06 | 101.76 | 100.11 | 100.98 | 86.27 | 106.13 | 102.30 | 101.09 | 91.39 | 106.71 | 107.93 | 108.92 | 87.69 | 63.72 | 52.65 | 60.28 | 58.57 | 72.64 | 86.19 | 173.58 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 119.01 + 39.26 – 66.22
= 92.06
The cash conversion cycle of Howmet Aerospace Inc has shown fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 97.92 days, indicating that it took approximately 97.92 days for the company to convert its investments in inventory and other resources into cash flows from sales. This represents an improvement compared to Q3 2023 where the cycle was 108.31 days.
Although the cash conversion cycle decreased in Q4 2023, the company's efficiency in managing its working capital remains a point of focus as the cycle has shown variability in recent quarters. It is important for Howmet Aerospace Inc to continue monitoring and managing its inventory, accounts receivable, and accounts payable to improve its cash conversion cycle and enhance its overall liquidity position.
Peer comparison
Dec 31, 2023