Avery Dennison Corp (AVY)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 46.60 | 47.89 | 49.42 | 51.17 | 45.76 | 45.41 | 45.57 | 45.47 | 44.73 | 44.81 | 44.03 | 45.12 | 42.71 | 40.45 | 43.97 | 42.27 | 36.10 | 31.66 | 33.05 | 34.97 |
| Days of sales outstanding (DSO) | days | 62.43 | 63.53 | 61.33 | — | 56.02 | — | — | — | 62.31 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 64.64 | 64.74 | 61.60 | 60.21 | 60.69 | 61.91 | 64.93 | 64.95 | 64.03 | 64.64 | 65.47 | 67.57 | 62.58 | 56.94 | 57.89 | 60.24 | 58.04 | 49.58 | 51.98 | 52.51 |
| Cash conversion cycle | days | 44.40 | 46.68 | 49.14 | -9.04 | 41.09 | -16.50 | -19.37 | -19.48 | 43.01 | -19.83 | -21.44 | -22.44 | -19.87 | -16.49 | -13.91 | -17.97 | -21.95 | -17.91 | -18.93 | -17.55 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 46.60 + 62.43 – 64.64
= 44.40
The cash conversion cycle of Avery Dennison Corp has fluctuated over the past few quarters, indicating varying efficiency in managing its working capital. A positive cash conversion cycle means the company takes longer to convert its investments in inventory and receivables into cash, while a negative cycle suggests the company is able to generate cash quickly.
In the most recent quarter, ending December 31, 2023, the cash conversion cycle stood at 44.40 days, indicating the company took approximately 44 days to convert its investments in inventory and receivables into cash. This was an improvement from the previous quarter, where the cycle was 46.68 days.
However, it is worth noting that in the quarter ending March 31, 2023, the cash conversion cycle was -9.04 days, which suggests a significant improvement as the company was able to convert investments into cash rapidly. This could be due to efficient inventory management and quick collection of receivables.
Looking at the trend over several quarters, it appears that Avery Dennison Corp has overall shown a mix of positive and negative cash conversion cycles, which indicates fluctuations in working capital management efficiency. Further analysis into the company's inventory turnover, accounts receivable collection period, and accounts payable payment period may provide more insights into the factors driving these fluctuations.
Peer comparison
Dec 31, 2023