MKS Instruments Inc (MKSI)

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	105.86	109.16	107.26	69.19	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
Days of sales outstanding (DSO)	days	66.77	68.88	68.59	63.29	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
Number of days of payables	days	40.42	35.54	33.28	20.67	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
Cash conversion cycle	days	132.21	142.51	142.57	111.82	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 105.86 + 66.77 – 40.42
= 132.21

The cash conversion cycle of MKS Instruments Inc has exhibited fluctuations over the periods provided. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources back into cash from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle for MKS Instruments Inc has ranged from a high of 168.48 days (September 30, 2022) to a low of 111.82 days (March 31, 2024). A declining trend was observed from the first quarter of 2023 to the first quarter of 2024, with the cycle reducing from 147.27 days to 111.82 days.

A lower cash conversion cycle indicates that the company is able to quickly convert its inventories into sales and cash, thus improving liquidity and potentially reducing the need for external financing. Conversely, a higher cash conversion cycle could be indicative of inefficiencies in managing inventory, collecting receivables, or paying suppliers.

It is important for MKS Instruments Inc to continue monitoring and managing its cash conversion cycle effectively to optimize its working capital management, enhance liquidity, and support sustainable growth.