Marathon Digital Holdings Inc (MARA)
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 | — | 9.90 | 75.51 | 3,422.59 | — |
| Days of sales outstanding (DSO) | days | — | 0.06 | 73.54 | 6,293.81 | — |
| Number of days of payables | days | 6.11 | 1.16 | 17.03 | — | — |
| Cash conversion cycle | days | -6.11 | 8.79 | 132.02 | 9,716.39 | 0.00 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 6.11
= -6.11
The cash conversion cycle measures how efficiently a company manages its cash flow from the initial investment in inventory to receiving cash from customers. Looking at Marathon Digital Holdings Inc's cash conversion cycle over the past five years, we can observe a significant improvement in efficiency.
In 2019, the company had a cash conversion cycle of 0.00 days, indicating that it was able to convert inventory into cash almost immediately. However, in 2020, there was a dramatic increase to 9,716.39 days, suggesting significant challenges in managing working capital and converting inventory into sales.
The situation improved in 2021, with a cash conversion cycle of 132.02 days, but still indicating a relatively long period for inventory to be converted into cash. Subsequently, in 2022, we see further progress as the cash conversion cycle decreased to 8.79 days, showing better efficiency in managing working capital.
Most recently, by the end of 2023, Marathon Digital Holdings Inc achieved a negative cash conversion cycle of -6.11 days, signifying that the company is managing its working capital exceptionally well, resulting in a faster conversion of inventory into cash.
Overall, the trend indicates a remarkable improvement in the company's cash conversion cycle, with a shift from prolonged conversion periods to a more efficient and effective cash conversion process in recent years.
Peer comparison
Dec 31, 2023