Metallus Inc (MTUS)

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	65.90	54.84	66.32	72.36	79.03
Days of sales outstanding (DSO)	days	31.16	23.75	28.76	27.39	23.03
Number of days of payables	days	38.53	32.26	44.62	36.30	19.43
Cash conversion cycle	days	58.54	46.33	50.46	63.45	82.63

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.90 + 31.16 – 38.53
= 58.54

The cash conversion cycle of Metallus Inc has shown fluctuations over the past five years, ranging from as low as 46.33 days in 2022 to as high as 82.63 days in 2019. A decreasing trend in the cash conversion cycle generally indicates an improvement in the efficiency of the company's working capital management, as it takes fewer days for the company to convert its resources into cash.

In 2023, the cash conversion cycle increased to 58.54 days from the previous year, indicating a potential slowdown in the company's efficiency in managing its cash inflows and outflows. This may be a cause for concern as a longer cash conversion cycle can tie up more of the company's capital in working capital, potentially impacting its liquidity and overall financial health.

It is important for Metallus Inc to closely monitor and analyze the components of the cash conversion cycle, such as the days sales outstanding (DSO), days inventory outstanding (DIO), and days payable outstanding (DPO), to identify areas for improvement and implement strategies to shorten the cash conversion cycle. A shorter cash conversion cycle enhances the company's ability to generate cash, reduce financing costs, and improve its overall financial performance.