Masco Corporation (MAS)
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 | 56.41 | 60.69 | 62.96 | 54.01 | 48.78 |
| Days of sales outstanding (DSO) | days | 50.61 | 48.95 | 54.00 | 54.40 | 53.16 |
| Number of days of payables | days | 46.36 | 43.06 | 54.11 | 55.06 | 45.09 |
| Cash conversion cycle | days | 60.66 | 66.57 | 62.86 | 53.35 | 56.84 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.41 + 50.61 – 46.36
= 60.66
The cash conversion cycle of Masco Corp., a measure of how efficiently the company manages its working capital, fluctuated over the past five years. In 2023, the cash conversion cycle decreased to 62.88 days from 70.28 days in 2022. This indicates that the company improved its efficiency in converting its investments in raw materials and inventory into cash from sales.
Comparing to the earlier years, the cash conversion cycle was relatively stable in 2021 and 2019 at 62.36 days and 59.06 days, respectively. However, there was a noticeable improvement in 2020 with the cycle decreasing to 56.44 days.
Overall, Masco Corp. demonstrated variability in its cash conversion efficiency over the past five years, with an observable improvement in 2020. Maintaining a lower cash conversion cycle indicates that the company is able to optimize its working capital management and swiftly convert its assets into cash to meet its operational needs.
Peer comparison
Dec 31, 2023