Mettler-Toledo International Inc (MTD)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 80.77 89.99 87.68 88.41 91.04 86.35 89.68 96.59 100.03 101.92 104.96 102.37 97.85 93.12 88.95 87.39 84.59 85.30 88.81 85.22
Days of sales outstanding (DSO) days 64.77 61.82 61.78 62.71 63.97 59.26 59.81 59.13 66.05 57.23 59.17 59.17 63.55 60.86 63.06 64.70 70.25 63.67 60.93 63.55
Number of days of payables days 50.93 48.57 47.73 44.82 49.64 39.96 38.65 39.93 57.19 51.19 60.61 59.47 64.42 53.53 53.55 51.48 49.97 42.79 46.19 49.16
Cash conversion cycle days 94.60 103.23 101.73 106.29 105.36 105.65 110.84 115.80 108.89 107.96 103.52 102.08 96.98 100.44 98.46 100.62 104.87 106.18 103.55 99.61

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.77 + 64.77 – 50.93
= 94.60

The cash conversion cycle for Mettler-Toledo International Inc has shown some fluctuation over the past few years. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales to customers.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a high of 115.80 days to a low of 94.60 days. Initially, the cycle was around 100 days, then it increased in the latter half of 2022 and early 2023. However, in the subsequent periods, the company managed to bring down the cash conversion cycle under 100 days, indicating efficiency in managing its working capital.

While a lower cash conversion cycle is generally preferred as it signifies that the company is able to generate cash quickly from its operating activities, it is essential to strike a balance between speedy cash conversion and maintaining sufficient inventory levels to meet customer demand. Overall, the trend in the cash conversion cycle for Mettler-Toledo International Inc demonstrates the company's efforts to effectively manage its working capital and optimize cash flow generation.