Meritage Corporation (MTH)

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	437.08	373.74	353.88	367.20	287.22
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	437.08	373.74	353.88	367.20	287.22

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 437.08 + — – —
= 437.08

The cash conversion cycle of Meritage Corporation has shown fluctuations over the years based on the provided data.

On December 31, 2020, the cash conversion cycle stood at 287.22 days, indicating that it took the company approximately 287 days to convert its investments in inventory and accounts receivable back into cash.

By December 31, 2021, the cash conversion cycle increased to 367.20 days, suggesting a longer period for the company to convert its resources into cash, impacting its liquidity position.

In the following year, on December 31, 2022, there was a slight improvement in the cash conversion cycle, which decreased to 353.88 days. This could imply a better management of working capital, resulting in a more efficient conversion of assets into cash.

However, by December 31, 2023, the cash conversion cycle extended to 373.74 days, indicating potential challenges in managing working capital effectively and converting investments into cash promptly.

On December 31, 2024, the cash conversion cycle further increased to 437.08 days, reflecting a significant delay in converting resources into cash, which may lead to liquidity concerns and inefficiencies in the company's operational cycle.

Overall, the fluctuating trend in Meritage Corporation's cash conversion cycle highlights the importance of closely monitoring working capital management and operational efficiency to ensure timely conversion of investments into cash, which is crucial for sustaining liquidity and optimizing financial performance.