Meta Platforms Inc. (META)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 37.87 | 44.01 | 42.24 | 43.51 | 48.21 |
| Number of days of payables | days | 93.03 | 80.31 | 88.28 | 82.75 | 29.10 |
| Cash conversion cycle | days | -55.16 | -36.30 | -46.04 | -39.24 | 19.10 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 37.87 – 93.03
= -55.16
The cash conversion cycle for Meta Platforms Inc. has shown a notable trend over the past five years. Starting at 19.10 days on December 31, 2020, the company's cash conversion cycle decreased significantly, reaching -39.24 days by December 31, 2021. This negative value indicates that Meta Platforms Inc. was able to convert its investments in inventory and receivables into cash more quickly than its payables were due, resulting in a shorter overall cash conversion cycle.
The trend continued in the following years, with the cash conversion cycle further decreasing to -46.04 days by December 31, 2022, -36.30 days by December 31, 2023, and reaching its lowest point at -55.16 days by December 31, 2024. These decreasing values suggest that Meta Platforms Inc. was able to manage its working capital efficiently, allowing the company to generate cash quickly in the operating cycle.
Overall, the consistent decline in Meta Platforms Inc.'s cash conversion cycle over the five-year period indicates effective management of working capital and indicates a strong liquidity position for the company.
Peer comparison
Dec 31, 2024