Meta Platforms Inc. (META)
Cash conversion cycle
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 37.87 | 34.46 | 35.50 | 34.53 | 44.01 | 37.38 | 38.02 | 34.44 | 42.24 | 34.74 | 35.27 | 34.79 | 43.51 | 39.33 | 40.80 | 39.79 | 48.21 | 37.14 | 36.40 | 36.33 |
| Number of days of payables | days | 93.02 | 96.30 | 41.58 | 52.15 | 80.32 | 70.56 | 54.04 | 65.61 | 88.28 | 76.04 | 78.12 | 64.88 | 82.75 | 52.67 | 35.19 | 37.45 | 29.10 | 26.96 | 24.10 | 22.56 |
| Cash conversion cycle | days | -55.16 | -61.84 | -6.08 | -17.62 | -36.30 | -33.18 | -16.02 | -31.17 | -46.04 | -41.30 | -42.84 | -30.09 | -39.24 | -13.34 | 5.61 | 2.35 | 19.10 | 10.18 | 12.30 | 13.77 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 37.87 – 93.02
= -55.16
The cash conversion cycle of Meta Platforms Inc. has shown fluctuating trends over the years. The company's ability to convert its investments in inventory and accounts receivable into cash has varied significantly.
From March 31, 2020, to September 30, 2021, the cash conversion cycle decreased steadily from 13.77 days to -13.34 days. A negative cash conversion cycle suggests that Meta Platforms Inc. is able to collect cash from customers before having to pay its suppliers, indicating efficient cash management and potential for improved liquidity.
However, from December 31, 2021, to December 31, 2024, the trend reversed with the cash conversion cycle becoming increasingly negative, reaching its lowest point of -61.84 days on September 30, 2024. This could indicate possible challenges in inventory management or stretched payment terms with suppliers.
Overall, while a negative cash conversion cycle can be seen as a positive sign in terms of cash flow efficiency, it is important for Meta Platforms Inc. to closely monitor and manage its working capital components to ensure sustainable operations and financial health in the long run.
Peer comparison
Dec 31, 2024