Meta Platforms Inc. (META)
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 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 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 | 49.23 | 42.24 | 43.96 | 40.24 |
| Number of days of payables | days | 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 | 38.96 | 26.00 | 21.09 | 21.52 |
| Cash conversion cycle | days | -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 | 10.26 | 16.24 | 22.87 | 18.72 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 44.01 – 80.32
= -36.30
The cash conversion cycle of Meta Platforms Inc has shown fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle stood at -24.43 days, indicating that Meta Platforms took about 24 days on average to convert its investments in inventory and other resources into cash. This represents an improvement from the previous quarter where the cycle was -22.78 days.
In Q2 2023, the company experienced a significant decrease in its cash conversion cycle, reaching -5.36 days, implying that Meta Platforms efficiently managed its working capital during that period. However, this improvement was not sustained in the subsequent quarters.
Overall, Meta Platforms has demonstrated the ability to efficiently convert its resources into cash, as evidenced by negative cash conversion cycle figures across most quarters. This negative cycle suggests that the company can generate cash quickly from its operational activities, which can be beneficial for meeting short-term obligations and investing in growth opportunities.
Peer comparison
Dec 31, 2023