Waste Management Inc (WM)
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 | 4.69 | 4.34 | 4.39 | 4.58 | 4.21 | 4.35 | 4.23 | 4.24 | 4.14 | 4.06 | 4.13 | 4.00 | 3.73 | 3.77 | 3.78 | 3.90 | 3.98 | 5.21 | 5.21 | 4.99 |
| Days of sales outstanding (DSO) | days | 60.89 | 54.82 | 53.32 | 48.70 | 52.76 | 53.92 | 52.94 | 48.74 | 52.06 | 51.23 | 52.14 | 50.59 | 53.59 | 58.57 | 61.19 | 58.73 | 65.18 | 54.13 | 50.91 | 63.07 |
| Number of days of payables | days | 46.57 | 43.69 | 42.83 | 39.16 | 41.57 | 43.17 | 40.46 | 37.64 | 44.55 | 37.98 | 35.89 | 37.11 | 38.04 | 41.87 | 41.82 | 38.16 | 36.00 | 39.40 | 39.93 | 44.39 |
| Cash conversion cycle | days | 19.01 | 15.47 | 14.88 | 14.12 | 15.40 | 15.10 | 16.71 | 15.34 | 11.65 | 17.31 | 20.38 | 17.48 | 19.29 | 20.46 | 23.15 | 24.48 | 33.16 | 19.95 | 16.19 | 23.67 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.69 + 60.89 – 46.57
= 19.01
The cash conversion cycle of Waste Management Inc has shown fluctuating trends over the time period from March 31, 2020, to December 31, 2024. The cash conversion cycle measures how efficiently a company manages its working capital, specifically focusing on how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to December 2024, Waste Management Inc's cash conversion cycle ranged from a low of 11.65 days in December 2022 to a high of 33.16 days in December 2020. The company managed to reduce this cycle over time, indicating improvements in managing its working capital and cash flows efficiently.
In analyzing the cycle, a decreasing trend is generally positive as it suggests that the company is able to convert its investments into cash more quickly. On the other hand, an increasing trend may indicate potential issues with working capital management or slower cash flows from sales.
Overall, Waste Management Inc's cash conversion cycle showed variability but displayed a general downward trend, which is a positive indicator of efficient working capital management and cash flow conversion within the company during the period under review.
Peer comparison
Dec 31, 2024