Murphy USA Inc (MUSA)
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 | 45.07 | 43.83 | 43.36 | 48.60 | 37.78 |
| Days of sales outstanding (DSO) | days | 5.71 | 4.39 | 4.11 | 5.47 | 4.50 |
| Number of days of payables | days | 68.72 | 75.22 | 58.22 | 45.45 | 46.61 |
| Cash conversion cycle | days | -17.95 | -27.00 | -10.75 | 8.62 | -4.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.07 + 5.71 – 68.72
= -17.95
The cash conversion cycle of Murphy USA Inc has fluctuated over the past five years. In 2023, the company managed to convert its inventory into cash in 2.31 days on average. This represents a significant improvement compared to the previous year when the cash conversion cycle was 0.42 days. The lower the cash conversion cycle, the more efficient the company is in managing its working capital.
In 2021, the cash conversion cycle was 1.76 days, showing a slight increase from the prior year. However, in 2020, there was a significant increase in the cash conversion cycle to 6.14 days, indicating that it took the company longer to convert its inventory into cash during that period. This may be a result of various factors such as changes in sales patterns, inventory management, or payment terms with suppliers.
In 2019, the cash conversion cycle was 2.99 days, which is slightly higher than in 2023 but lower than in 2020. Overall, despite some fluctuations, Murphy USA Inc has generally been able to maintain a relatively efficient cash conversion cycle over the past five years. By effectively managing its inventory, receivables, and payables, the company can optimize its working capital and liquidity position.
Peer comparison
Dec 31, 2023