AbbVie Inc (ABBV)

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	32.94	31.76	30.45	37.19	88.96
Days of sales outstanding (DSO)	days	74.96	70.76	64.80	70.30	59.56
Number of days of payables	days	29.64	26.04	28.06	25.57	71.24
Cash conversion cycle	days	78.26	76.48	67.20	81.92	77.27

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.94 + 74.96 – 29.64
= 78.26

The cash conversion cycle of Abbvie Inc has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 82.31 days from 84.28 days in 2022, indicating an improvement in the efficiency of its cash management. This trend follows a pattern of variability, as the cycle was relatively lower in 2021 at 69.95 days compared to a higher cycle of 94.83 days in 2020.

Overall, Abbvie Inc's cash conversion cycle has shown some instability, with fluctuations in the efficiency of converting its investments in inventory and other resources into cash inflows. This variability may stem from factors such as changes in market demand, inventory management practices, and payment terms with suppliers and customers. Monitoring and analyzing these fluctuations can provide valuable insights into the company's working capital management and operational efficiency.