Mueller Industries Inc (MLI)
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 | 53.36 | 53.12 | 60.99 | 55.81 | 53.29 | 52.25 | 53.64 | 53.62 | 50.10 | 50.02 | 51.93 | 58.02 | 53.73 | 48.86 | 43.74 | 44.67 | 48.36 | 45.61 | 48.18 | 55.36 |
| Days of sales outstanding (DSO) | days | 37.48 | 41.84 | 45.45 | — | 34.77 | 39.56 | 53.62 | 53.45 | 45.18 | 51.05 | 63.62 | 62.82 | 54.77 | 51.90 | 44.62 | 46.91 | 40.88 | 48.09 | 46.91 | 45.91 |
| Number of days of payables | days | 16.91 | 19.25 | 20.31 | 22.09 | 15.19 | 19.20 | 23.54 | 25.76 | 21.05 | 22.26 | 25.68 | 28.13 | 25.20 | 19.46 | 16.75 | 15.59 | 14.18 | 16.77 | 17.01 | 17.23 |
| Cash conversion cycle | days | 73.93 | 75.72 | 86.13 | 33.72 | 72.86 | 72.62 | 83.72 | 81.31 | 74.23 | 78.81 | 89.87 | 92.72 | 83.30 | 81.30 | 71.62 | 75.99 | 75.06 | 76.92 | 78.08 | 84.04 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.36 + 37.48 – 16.91
= 73.93
The cash conversion cycle of Mueller Industries Inc has shown fluctuations over the analyzed periods. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From December 2019 to December 2023, the company's cash conversion cycle has ranged from a low of 71.62 days to a high of 92.72 days, indicating varying efficiencies in managing its working capital. A longer cash conversion cycle suggests that Mueller Industries takes more time to generate cash from its operations, potentially tying up more capital in inventory and accounts receivable.
In the most recent period, as of December 2023, the cash conversion cycle has decreased to 73.93 days compared to the preceding periods. This may suggest improvements in managing inventory levels, collecting accounts receivable, and negotiating payment terms with suppliers.
On the other hand, the cash conversion cycle peaked in June 2021 at 89.87 days, signifying potential challenges in working capital management during that period. It is essential for the company to focus on optimizing its cash conversion cycle to ensure efficient use of its resources and improve overall liquidity.
Overall, fluctuations in the cash conversion cycle of Mueller Industries Inc indicate the need for continuous monitoring and proactive management of working capital to enhance operational efficiency and maintain healthy cash flows.
Peer comparison
Dec 31, 2023