NewMarket Corporation (NEU)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	97.08	86.47	108.49	100.62	103.38
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	97.08	86.47	108.49	100.62	103.38

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 97.08 + — – —
= 97.08

The cash conversion cycle of NewMarket Corporation has shown some fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle stood at 103.38 days, indicating that it took approximately 103 days for the company to convert its investments in inventory back into cash from sales.

By December 31, 2021, there was a slight improvement in the cash conversion cycle, decreasing to 100.62 days. This reduction suggests that the company may have managed its working capital more effectively during this period.

However, by December 31, 2022, the cash conversion cycle increased to 108.49 days, showing that the company took longer to convert its investments in inventory into cash compared to the prior year.

The most significant improvement in the cash conversion cycle occurred by December 31, 2023, when it decreased to 86.47 days. This reduction indicates that NewMarket Corporation was able to efficiently manage its working capital, potentially through better inventory management or faster collection of receivables.

As of December 31, 2024, the cash conversion cycle slightly increased to 97.08 days but remained lower than the 2022 level, suggesting that the company continued to make progress in handling its working capital effectively.

In conclusion, the analysis of NewMarket Corporation's cash conversion cycle shows fluctuations over the years, with periods of improvement and slight setbacks. Continuous monitoring and management of the cash conversion cycle are essential for the company to optimize its working capital efficiency.