Mercer International Inc (MERC)
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 | 69.14 | 69.71 | 72.64 | 97.98 | 86.21 | 80.32 | 75.52 | 81.76 | 88.64 | 86.86 | 80.91 | 75.41 | 72.95 | 71.68 | 67.18 | 86.30 | 115.44 | 193.14 | 578.01 | 615.01 |
| Days of sales outstanding (DSO) | days | 58.74 | 48.16 | 58.43 | 58.60 | 57.72 | 54.54 | 53.47 | 73.68 | 81.63 | 57.47 | 56.20 | 62.13 | 60.98 | 57.24 | 56.30 | 56.25 | 48.57 | 52.82 | 65.09 | 75.99 |
| Number of days of payables | days | 12.36 | 13.37 | 16.79 | 18.19 | 18.78 | 20.58 | 16.57 | 17.88 | 15.96 | 17.76 | 23.41 | 19.44 | 15.16 | 20.48 | 17.32 | 23.07 | 34.97 | 40.45 | 106.34 | 111.32 |
| Cash conversion cycle | days | 115.52 | 104.51 | 114.27 | 138.39 | 125.14 | 114.28 | 112.42 | 137.57 | 154.31 | 126.57 | 113.70 | 118.10 | 118.77 | 108.44 | 106.16 | 119.49 | 129.04 | 205.51 | 536.76 | 579.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.14 + 58.74 – 12.36
= 115.52
The cash conversion cycle for Mercer International Inc. has exhibited some fluctuation over the past eight quarters. In Q1 2023, the company's cash conversion cycle was at its highest point, at 149.05 days, indicating that it took longer for the company to convert its investment in inventory into cash during that period. This was followed by a decrease in the cash conversion cycle in Q2 2023 to 118.71 days before experiencing a slight increase in Q3 2023 to 113.84 days.
Overall, the company seems to have improved its cash conversion efficiency compared to the higher levels seen in Q1 2023, but the cycle has not returned to the lower levels observed in Q2 2022. Mercer International Inc. experienced its lowest cash conversion cycle in Q2 2022 at 116.03 days, indicating a relatively faster conversion of inventory to cash during that quarter.
It is important for the company to continue monitoring and managing its cash conversion cycle effectively to ensure efficient working capital management and maximize liquidity. A shorter cash conversion cycle generally suggests better management of working capital and efficient operations, which can positively impact the company's financial health and profitability.