Materion Corporation (MTRN)
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 | 107.24 | 95.91 | 93.64 | 79.03 | 78.13 |
| Days of sales outstanding (DSO) | days | 43.07 | 45.25 | 54.24 | 51.73 | 47.75 |
| Number of days of payables | days | 30.52 | 24.46 | 22.36 | 17.53 | 14.29 |
| Cash conversion cycle | days | 119.79 | 116.70 | 125.51 | 113.22 | 111.59 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 107.24 + 43.07 – 30.52
= 119.79
The cash conversion cycle of Materion Corp has shown some fluctuations over the past five years. In 2023, the cash conversion cycle was 129.87 days, indicating that the company takes approximately 130 days to convert its investments in inventory back into cash from sales. This was a slight increase from the previous year's cycle of 126.11 days.
Looking further back, in 2021 the cash conversion cycle was 135.79 days, representing a longer period compared to 2023. The cycle then decreased to 124.06 days in 2020 and further dropped to 105.64 days in 2019, showing an improvement in the company's ability to manage its working capital efficiently.
Overall, Materion Corp's cash conversion cycle has been somewhat volatile, with fluctuations in the time it takes to convert inventory into cash. It is essential for the company to monitor and manage its cash conversion cycle effectively to optimize its working capital and liquidity position in the long term.