NewMarket Corporation (NEU)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 97.08 | 101.63 | 94.45 | 94.74 | 86.47 | 93.62 | 95.91 | 97.40 | 108.48 | 103.37 | 95.45 | 100.10 | 100.62 | 101.92 | 105.94 | 104.96 | 103.38 | 94.47 | 87.70 | 87.07 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 97.08 | 101.63 | 94.45 | 94.74 | 86.47 | 93.62 | 95.91 | 97.40 | 108.48 | 103.37 | 95.45 | 100.10 | 100.62 | 101.92 | 105.94 | 104.96 | 103.38 | 94.47 | 87.70 | 87.07 |
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 been fluctuating over the past few years, indicating varying efficiency in managing its cash flows related to the production and sale of goods. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle has shown a mixed trend, with some periods showing improvements and others experiencing increases. The cycle ranged from a low of 86.47 days on December 31, 2023, to a high of 108.48 days on December 31, 2022.
A shorter cash conversion cycle is generally viewed favorably as it indicates that the company is able to collect cash from sales more quickly and efficiently. Conversely, a longer cycle suggests that the company may be taking longer to convert investments in inventory into cash flows.
NewMarket Corporation should continue to monitor its cash conversion cycle closely and work towards optimizing it to ensure efficient management of working capital and maximize cash flow generation. Analyzing the reasons behind fluctuations and implementing strategies to streamline the cycle could help improve overall financial performance and liquidity.
Peer comparison
Dec 31, 2024