AptarGroup Inc (ATR)
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 | 1,968.65 | 3,233.09 | 2,215.61 | 68.44 | 69.09 |
| Days of sales outstanding (DSO) | days | 70.94 | 74.38 | 75.89 | 70.65 | 71.27 |
| Number of days of payables | days | 1,260.77 | 2,127.13 | 1,431.66 | 43.97 | 35.43 |
| Cash conversion cycle | days | 778.82 | 1,180.34 | 859.83 | 95.12 | 104.93 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,968.65 + 70.94 – 1,260.77
= 778.82
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Aptargroup Inc.'s cash conversion cycle has fluctuated over the past five years, indicating varying efficiency in managing its working capital.
In 2023, the cash conversion cycle was 101.22 days, a slight improvement from 102.54 days in 2022. This suggests that the company was able to reduce the time it takes to convert its resources into cash compared to the previous year. However, the cycle was longer than in 2020 when it was 97.47 days, indicating some deterioration in efficiency.
When looking back to 2019, which had a cash conversion cycle of 108.02 days, it is evident that Aptargroup Inc. has made progress in streamlining its working capital management over the last five years. The 2023 figure of 101.22 days represents a significant improvement from 2019.
Overall, Aptargroup Inc. should continue to focus on optimizing its cash conversion cycle to enhance its liquidity and operational efficiency. By efficiently managing its inventory, receivables, and payables, the company can strive for a shorter cash conversion cycle, which can positively impact its financial performance and growth prospects.
Peer comparison
Dec 31, 2023