MP Materials Corp (MP)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 145.53 | 234.07 | 189.98 | 140.33 | 115.03 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 145.53 | 234.07 | 189.98 | 140.33 | 115.03 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 145.53 + — – —
= 145.53
MP Materials Corp's cash conversion cycle has shown a fluctuating trend over the past five years. In December 2020, the cash conversion cycle was relatively low at 115.03 days, indicating that the company was efficient in converting its investments in inventory and accounts receivable into cash.
However, by December 2023, the cash conversion cycle had significantly increased to 234.07 days, suggesting a longer time taken for the company to convert its resources into cash. This could be a sign of potential inefficiencies in managing inventory, accounts receivable, and accounts payable.
In December 2024, the cash conversion cycle decreased to 145.53 days, showing a partial improvement from the previous year. It is essential for MP Materials Corp to closely monitor and optimize its cash conversion cycle to streamline its working capital management and improve overall financial performance.
Peer comparison
Dec 31, 2024