MasTec Inc (MTZ)
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 | 3.26 | 3.98 | 5.04 | 5.71 | 4.37 | 5.43 | 5.37 | 4.63 | 4.42 | 4.65 | 4.93 | 5.55 | 5.66 | 5.30 | 6.25 | 8.29 | 10.83 | 19.61 | 161.95 | 156.55 |
| Days of sales outstanding (DSO) | days | 41.69 | 48.03 | 49.37 | 48.12 | 52.25 | 44.99 | 43.72 | 40.51 | 46.79 | 44.90 | 44.65 | 47.91 | 45.30 | 52.36 | 50.45 | 41.03 | 43.21 | 96.46 | 91.44 | 103.12 |
| Number of days of payables | days | 37.46 | 37.44 | 30.68 | 32.04 | 41.12 | 39.76 | 34.70 | 32.17 | 31.64 | 34.89 | 35.54 | 37.86 | 36.06 | 36.09 | 37.56 | 41.51 | 57.90 | 114.86 | 807.75 | 718.98 |
| Cash conversion cycle | days | 7.48 | 14.57 | 23.73 | 21.78 | 15.50 | 10.66 | 14.39 | 12.98 | 19.57 | 14.66 | 14.04 | 15.60 | 14.90 | 21.56 | 19.14 | 7.81 | -3.87 | 1.20 | -554.36 | -459.32 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.26 + 41.69 – 37.46
= 7.48
The cash conversion cycle of MasTec Inc has fluctuated over the past few quarters, indicating varying efficiencies in managing its cash resources.
From the data provided:
- The company's cash conversion cycle ranged from a low of -554.36 days in March 2019 to a high of 23.73 days in June 2023.
- A negative cash conversion cycle, as seen in March 2019, suggests that MasTec Inc was able to collect cash from customers before needing to pay its suppliers, indicating an efficient working capital management strategy.
- However, as the cash conversion cycle increased in subsequent quarters, reaching a peak in June 2023, it suggests that MasTec Inc took longer to convert its resource inputs into cash, which can lead to potential liquidity challenges and inefficiencies in the cash flow cycle.
- The decline in efficiency seen in the cash conversion cycle in recent quarters may be attributed to factors such as changes in sales terms, payment terms with suppliers, inventory management issues, or delays in receiving customer payments.
- Overall, MasTec Inc's management should closely monitor and analyze the components of the cash conversion cycle to identify areas for improvement and enhance the company's cash flow management efficiency.
Peer comparison
Dec 31, 2023