Matthews International Corporation (MATW)
Cash conversion cycle
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.58 | 71.69 | 70.92 | 71.81 | 72.93 | 76.25 | 74.15 | 72.08 | 66.35 | 62.71 | 60.34 | 59.87 | 61.12 | 65.12 | 65.55 | 64.23 | 63.88 | 67.40 | 68.83 | 68.00 |
| Days of sales outstanding (DSO) | days | 41.87 | 38.47 | 37.55 | 41.98 | 40.27 | 36.99 | 43.64 | 45.62 | 45.77 | 43.43 | 46.55 | 66.52 | 67.67 | 66.38 | 68.38 | 73.34 | 71.91 | 66.37 | 71.14 | 74.74 |
| Number of days of payables | days | 31.24 | 32.76 | 30.00 | 27.11 | 32.02 | 31.72 | 34.35 | 29.73 | 35.72 | 30.78 | 34.42 | 34.80 | 36.44 | 33.98 | 31.39 | 26.60 | 30.25 | 27.96 | 33.01 | 23.00 |
| Cash conversion cycle | days | 79.21 | 77.40 | 78.47 | 86.68 | 81.19 | 81.52 | 83.45 | 87.97 | 76.41 | 75.36 | 72.47 | 91.60 | 92.36 | 97.52 | 102.54 | 110.96 | 105.54 | 105.81 | 106.96 | 119.74 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.58 + 41.87 – 31.24
= 79.21
The cash conversion cycle of Matthews International Corporation has shown fluctuations over the past several quarters. The cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
On average, the company's cash conversion cycle has been around 80 days, indicating that it takes approximately 80 days for the company to recoup its investment in inventory through revenue generation. A lower cash conversion cycle is generally preferable as it signifies faster turnover of resources into cash.
Analyzing the trend over the past few quarters, the company experienced a peak in the cash conversion cycle in the most recent quarter, which may suggest potential challenges in managing inventory, collecting receivables, or efficiently paying suppliers. Furthermore, the highest cash conversion cycle was observed in the last quarter of 2020, indicating a prolonged time to convert investments into cash during that period.
It is essential for Matthews International Corporation to focus on streamlining its operational processes to reduce the cash conversion cycle, improve liquidity, and enhance overall efficiency in managing working capital. By addressing the factors contributing to the prolonged cycle, the company can potentially optimize its cash flow management and strengthen its financial position in the long run.