Meritage Corporation (MTH)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 2,794.65 | 2,703.23 | 2,775.36 | 1,053.95 | 1,072.35 | 1,192.81 | 1,137.16 | 3,136.14 | 2,906.61 | 2,650.69 | 2,409.31 | 2,252.14 | 2,149.09 | 2,342.47 | 2,411.52 | 2,532.75 | 2,549.99 | 2,690.44 | 2,609.16 | 908.05 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 2,794.65 | 2,703.23 | 2,775.36 | 1,053.95 | 1,072.35 | 1,192.81 | 1,137.16 | 3,136.14 | 2,906.61 | 2,650.69 | 2,409.31 | 2,252.14 | 2,149.09 | 2,342.47 | 2,411.52 | 2,532.75 | 2,549.99 | 2,690.44 | 2,609.16 | 908.05 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,794.65 + — – —
= 2,794.65
The cash conversion cycle of Meritage Homes Corp. has shown improvement over the quarters analyzed. In Q4 2023, the company's cash conversion cycle was -5.58 days, indicating that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently compared to previous quarters. This trend continued from Q3 2023 and Q2 2023, where the cash conversion cycle was -9.15 days and -9.03 days, respectively.
Looking further back, in Q1 2023, the cash conversion cycle was also relatively low at -8.81 days, showing a consistent positive trend in the company's cash management. This improvement can be contrasted with the higher cash conversion cycles observed in Q4 2022, Q3 2022, Q2 2022, and Q1 2022, which were -9.72 days, -16.76 days, -21.19 days, and -16.36 days, respectively.
Overall, the negative values of the cash conversion cycle indicate that Meritage Homes Corp. has been efficiently managing its working capital, turning its inventory and accounts receivable into cash quickly. This improvement in cash conversion cycle reflects positively on the company's liquidity position and operational efficiency.
Peer comparison
Dec 31, 2023