NewMarket Corporation (NEU)

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	80.01	86.76	89.26	90.82	101.36	96.53	88.77	92.85	92.87	93.53	96.80	95.07	93.55	85.60	79.48	79.30	77.92	79.04	78.91	79.81
Days of sales outstanding (DSO)	days	59.39	57.98	58.48	60.37	60.93	66.56	74.13	70.61	61.75	66.33	66.98	68.25	61.69	60.07	53.31	57.83	56.55	57.28	58.52	57.89
Number of days of payables	days	40.53	37.07	37.04	34.05	43.87	46.53	53.73	51.53	45.85	48.94	54.79	50.02	44.31	43.39	28.54	38.15	38.07	32.95	34.57	27.33
Cash conversion cycle	days	98.86	107.67	110.70	117.13	118.41	116.56	109.16	111.93	108.77	110.92	108.99	113.30	110.93	102.29	104.25	98.98	96.40	103.37	102.86	110.37

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.01 + 59.39 – 40.53
= 98.86

The cash conversion cycle of NewMarket Corp. has shown fluctuations over the past eight quarters. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In Q4 2022, the cash conversion cycle was at its highest at 121.42 days, indicating that the company took a longer time to convert its investments into cash. However, by Q2 2023, the cycle decreased to 113.67 days, reflecting an improvement in the company's efficiency in managing its cash conversion process.

Although the cycle increased again in Q4 2023 to 101.14 days, it still remained lower than the previous year. This suggests that NewMarket Corp. has made some progress in managing its working capital and optimizing its inventory levels.

Overall, the trend in the cash conversion cycle fluctuates, but it is important for the company to continue monitoring and improving its working capital management to ensure efficient cash flows and profitability.