Sylvamo Corp (SLVM)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 46.52 | 45.04 | 40.46 |
| Days of sales outstanding (DSO) | days | 42.37 | 46.15 | 41.88 |
| Number of days of payables | days | 48.47 | 56.05 | 56.12 |
| Cash conversion cycle | days | 40.41 | 35.14 | 26.21 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 46.52 + 42.37 – 48.47
= 40.41
The cash conversion cycle of Sylvamo Corp has shown fluctuations over the past four years. In 2023, the company's cash conversion cycle stood at 39.77 days, slightly higher than the previous year's figure of 32.87 days. This suggests that the company took longer to convert its investment in inventory into cash receipts from sales during this period.
Comparing 2023 to 2021, the cash conversion cycle improved from 34.71 days to 39.77 days. This indicates that Sylvamo Corp was able to manage its inventory, accounts receivable, and accounts payable more efficiently in 2023 compared to the previous year.
In contrast, there was a significant improvement in the cash conversion cycle from 2020 to 2021, dropping from 85.41 days to 34.71 days. This indicates that the company was able to streamline its working capital management processes, translating into quicker cash conversion during 2021.
Overall, while there was a slight increase in the cash conversion cycle in 2023 compared to 2022, the company has shown some improvements in managing its working capital efficiency over the past few years, as evidenced by the variations in the cash conversion cycle figures.
Peer comparison
Dec 31, 2023