Altria Group (MO)
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 | 43.48 | 68.03 | 62.35 | 52.93 | 112.87 |
| Days of sales outstanding (DSO) | days | 1.10 | 0.73 | 0.71 | 2.00 | 2.33 |
| Number of days of payables | days | 20.83 | 31.82 | 23.45 | 10.23 | 16.00 |
| Cash conversion cycle | days | 23.75 | 36.93 | 39.61 | 44.70 | 99.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 43.48 + 1.10 – 20.83
= 23.75
The cash conversion cycle of Altria Group Inc. has fluctuated over the past five years. In 2019, the company had a relatively lengthy cash conversion cycle of 103.60 days, indicating that it took over three months for Altria to convert its investments in raw materials into cash from sales. Subsequently, there was a significant improvement in 2020 when the cash conversion cycle decreased to 75.96 days. This reduction suggests that the company became more efficient in managing its inventory levels, accounts receivable, and accounts payable during that period.
In 2021, the cash conversion cycle decreased further to 38.86 days, signaling an enhancement in Altria's liquidity management and operational efficiency. However, there was an increase in 2022 to 61.31 days, which may indicate that the company faced challenges in maintaining its improved cash conversion cycle performance. Finally, in 2023, Altria managed to decrease its cash conversion cycle to 38.22 days again, potentially indicating a renewed focus on optimizing working capital management practices.
Overall, Altria's fluctuating cash conversion cycle over the past five years demonstrates the company's efforts to streamline its operations and manage its working capital efficiently. Investors and stakeholders may monitor future changes in the cash conversion cycle to assess Altria's ongoing operational effectiveness and financial performance.
Peer comparison
Dec 31, 2023