Materion Corporation (MTRN)
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 | 140.36 | 113.71 | 113.25 | 116.55 | 107.24 | 109.68 | 108.23 | 100.01 | 95.91 | 96.09 | 135.93 | 213.39 | 752.35 | 1,384.99 | 925.25 | 696.83 | 532.64 | 679.99 | 744.36 | 845.78 |
| Days of sales outstanding (DSO) | days | 43.12 | 47.43 | 42.00 | 43.63 | 43.07 | 41.23 | 40.99 | 44.00 | 45.25 | 31.11 | — | — | 54.24 | — | — | — | 166.68 | 180.08 | 169.51 | 155.41 |
| Number of days of payables | days | 33.68 | 31.09 | 28.69 | 33.61 | 30.52 | 22.59 | 29.44 | 29.20 | 24.46 | 22.06 | 36.59 | 57.04 | 179.68 | 317.99 | 256.50 | 185.14 | 118.18 | 181.56 | 184.78 | 223.71 |
| Cash conversion cycle | days | 149.79 | 130.05 | 126.56 | 126.57 | 119.79 | 128.32 | 119.77 | 114.80 | 116.70 | 105.14 | 99.33 | 156.36 | 626.91 | 1,067.00 | 668.75 | 511.68 | 581.15 | 678.51 | 729.08 | 777.48 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 140.36 + 43.12 – 33.68
= 149.79
The cash conversion cycle of Materion Corporation has shown fluctuations over the period analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
From March 31, 2020, until June 30, 2020, there was a reduction in the cash conversion cycle from 777.48 days to 729.08 days, indicating an improvement in efficiency. However, from September 30, 2020, to December 31, 2020, there was a more significant decrease to 581.15 days, reflecting a further improvement.
The trend continued positively into the first quarter of 2021, reaching 511.68 days by March 31, 2021. Subsequently, in June 2021, there was an unexpected increase to 668.75 days, which reversed the improving trend.
The cash conversion cycle spiked significantly in the third quarter of 2021, reaching 1,067.00 days, which suggests potential issues with managing working capital efficiently during this period. However, by the end of December 31, 2021, the cycle had reduced to 626.91 days, indicating some recovery.
A substantial improvement was noted in the first quarter of 2022, with the cash conversion cycle dropping significantly to 156.36 days, signaling enhanced efficiency in converting investments into cash flows. The trend continued positively through the rest of 2022 and 2023, with the cycle remaining relatively stable within a reasonable range.
Overall, Materion Corporation's cash conversion cycle has experienced fluctuations, indicating varying levels of efficiency in managing its working capital and generating cash flows from its operations. It is essential for the company to focus on maintaining a reasonable cycle length to ensure optimal cash flow management and operational efficiency.