Monster Beverage Corp (MNST)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	87.40	91.67	72.88	51.58	59.89
Days of sales outstanding (DSO)	days	61.56	59.13	59.05	52.99	46.99
Number of days of payables	days	50.78	43.53	49.66	45.96	45.50
Cash conversion cycle	days	98.18	107.27	82.28	58.61	61.38

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.40 + 61.56 – 50.78
= 98.18

The cash conversion cycle of Monster Beverage Corp. has fluctuated over the past five years, indicating variations in the efficiency of its working capital management. The cycle increased from 65.76 days in 2019 to 115.95 days in 2022, suggesting a potential slowdown in converting its resources into cash during that period. However, there was a significant improvement in 2023, as the cycle decreased to 105.44 days.

The company's cash conversion cycle was shortest in 2020, at 59.93 days, reflecting a more effective management of cash, inventory, and receivables during that year. In contrast, 2022 saw the longest cycle, which may have been due to issues such as higher inventory levels or slower collections on receivables.

Overall, Monster Beverage Corp. should continue monitoring and managing its cash conversion cycle closely to ensure optimal utilization of its resources and maximize liquidity efficiency.