MKS Instruments Inc (MKSI)

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	73.25	73.78	75.40	130.82	130.01	145.50	115.95	108.84	100.44	98.92	98.95	102.69	104.87	107.94	111.68	110.37	108.32	112.96	118.78	116.55
Days of sales outstanding (DSO)	days	67.53	65.06	65.80	62.45	77.82	85.06	58.64	58.80	55.25	57.25	58.92	62.23	62.12	61.87	68.89	71.55	66.53	65.34	61.53	62.33
Number of days of payables	days	24.17	22.59	22.85	46.00	56.69	62.08	30.46	29.61	29.24	27.10	27.81	29.24	23.13	24.77	23.92	25.77	20.72	21.48	21.81	23.36
Cash conversion cycle	days	116.62	116.24	118.35	147.27	151.14	168.48	144.12	138.03	126.44	129.07	130.06	135.68	143.86	145.04	156.65	156.16	154.12	156.83	158.50	155.52

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.25 + 67.53 – 24.17
= 116.62

The cash conversion cycle of MKS Instruments Inc has varied over the past years, with fluctuations between 116.24 days and 168.48 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

A lower value for the cash conversion cycle is generally seen as favorable, indicating that the company is efficiently managing its working capital and converting its investments into cash quickly. On the other hand, a higher value suggests that the company is taking longer to convert resources into cash, potentially tying up capital and leading to liquidity challenges.

MKS Instruments Inc experienced a peak cash conversion cycle of 168.48 days in September 2022, which then gradually decreased to the current value of 116.62 days as of December 2023. This downward trend suggests that the company has been able to improve its working capital management efficiency over the past quarters.

It is important for the company to continue monitoring and managing its cash conversion cycle to ensure optimal utilization of resources and maintain liquidity levels. Reducing the time it takes to convert investments into cash can positively impact the company's financial health and operational efficiency.