Merck KGaA (Merck KGaA) Cash Conversion Cycle : 179.35 (As of Dec. 2023)

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What is Merck KGaA Cash Conversion Cycle?

Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

Merck KGaA's Days Sales Outstanding for the three months ended in Dec. 2023 was 70.81.
Merck KGaA's Days Inventory for the three months ended in Dec. 2023 was 186.3.
Merck KGaA's Days Payable for the three months ended in Dec. 2023 was 77.76.
Therefore, Merck KGaA's Cash Conversion Cycle (CCC) for the three months ended in Dec. 2023 was 179.35.

Merck KGaA Cash Conversion Cycle Historical Data

The historical data trend for Merck KGaA's Cash Conversion Cycle can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Merck KGaA Cash Conversion Cycle Chart

Merck KGaA Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Cash Conversion Cycle

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146.92

156.80

183.27

184.51

192.98

Merck KGaA Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Cash Conversion Cycle	Get a 7-Day Free Trial															171.65	200.65	181.89	187.78	179.35

Competitive Comparison of Merck KGaA's Cash Conversion Cycle

For the Drug Manufacturers - Specialty & Generic subindustry, Merck KGaA's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Merck KGaA's Cash Conversion Cycle Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Merck KGaA's Cash Conversion Cycle distribution charts can be found below:

* The bar in red indicates where Merck KGaA's Cash Conversion Cycle falls into.

Merck KGaA Cash Conversion Cycle Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

Merck KGaA's Cash Conversion Cycle for the fiscal year that ended in Dec. 2023 is calculated as

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	69.55	+	193.89	-	70.46
	=	192.98

Merck KGaA's Cash Conversion Cycle for the quarter that ended in Dec. 2023 is calculated as:

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	70.81	+	186.3	-	77.76
	=	179.35

Merck KGaA (OTCPK:MKKGY) Cash Conversion Cycle Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.

Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.

Merck KGaA Cash Conversion Cycle Related Terms

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Merck KGaA (Merck KGaA) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Merck KGaA (OTCPK:MKKGY) » Definitions » Cash Conversion Cycle

Comparable Companies

Traded in Other Exchanges

MKGAF:USA MRK:Italy MRKd:UK 0O14:UK MRK:Germany MRCK:Austria

Address

Frankfurter Strasse 250, Darmstadt, HE, DEU, 64293

Website

https://www.emdgroup.com

Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment (47% of 2022 sales) primarily provides laboratory consumables and services to researchers in academia and applied fields, including the biopharmaceutical industry. In the healthcare segment (35%), Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In its electronics segment (18%), the company offers specialty materials to manufacture a variety of products, such as semiconductors, flat-screen televisions, automobiles, and cosmetics. In 1995, the E. Merck KG family publicly sold part of the company, resulting in the current 30% public ownership of the firm.