Enviri Corporation (NVRI)
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 | 19.28 | 19.12 | 17.26 | 17.92 | 206.79 |
| Days of sales outstanding (DSO) | days | 55.50 | 56.00 | 81.15 | 105.08 | 100.39 |
| Number of days of payables | days | 44.37 | 48.31 | 45.58 | 48.22 | 232.83 |
| Cash conversion cycle | days | 30.41 | 26.81 | 52.83 | 74.79 | 74.36 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.28 + 55.50 – 44.37
= 30.41
The cash conversion cycle of Enviri Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 30.41 days, showing an improvement from the previous year's cycle of 26.81 days. This indicates that the company was able to manage its working capital more efficiently in converting its inventory, accounts receivable, and accounts payable into cash during the year.
In 2021, the cash conversion cycle increased significantly to 52.83 days compared to the previous years, suggesting a potential slowdown in the conversion of inventory and receivables into cash or an increase in the time taken to pay off payables. The company managed to reduce this cycle in 2022 and 2023.
The cash conversion cycle was at its highest in 2020, with a cycle of 75.54 days, demonstrating a longer period required to convert inputs into cash flows. However, the company seems to have improved its working capital management since then, as evidenced by the decreasing trend in the cycle in the subsequent years.
Overall, Enviri Corp has made progress in optimizing its cash conversion cycle over the years, indicating better efficiency in managing its operating cycle and working capital components. Continued monitoring and improvement in this cycle can help the company maintain healthy cash flows and liquidity levels.