Mativ Holdings Inc. (MATV)
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 | 61.92 | 70.59 | 68.79 | 68.54 | 65.75 |
| Days of sales outstanding (DSO) | days | 38.58 | 49.99 | 63.66 | 54.14 | 57.68 |
| Number of days of payables | days | 24.44 | 30.75 | 30.75 | 23.08 | 27.05 |
| Cash conversion cycle | days | 76.07 | 89.84 | 101.70 | 99.61 | 96.38 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.92 + 38.58 – 24.44
= 76.07
The cash conversion cycle of Mativ Holdings Inc has shown variability over the past five years. The company's cash conversion cycle decreased from 102.88 days in 2019 to 83.99 days in 2023. This indicates that the company has been more efficient in managing its cash, inventory, and receivables in the recent year.
A lower cash conversion cycle suggests that the company is able to convert its inventory and receivables into cash more quickly, which is a positive sign of liquidity and operational efficiency. It implies that Mativ Holdings Inc is able to collect cash from customers and manage its working capital more effectively.
Overall, the decreasing trend in the cash conversion cycle over the years indicates that Mativ Holdings Inc has been successful in improving its cash management practices and optimizing its operational processes. This enhanced efficiency in cash conversion cycle can contribute positively to the company's financial performance and sustainability in the long term.
Peer comparison
Dec 31, 2023