The Boeing Company (BA)
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 | 52.67 | 55.87 | 66.00 | 66.10 | 53.70 |
| Days of sales outstanding (DSO) | days | 12.43 | 13.79 | 15.48 | 12.27 | 15.57 |
| Number of days of payables | days | 62.32 | 59.02 | 57.03 | 73.91 | 78.74 |
| Cash conversion cycle | days | 2.78 | 10.64 | 24.44 | 4.46 | -9.48 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.67 + 12.43 – 62.32
= 2.78
The cash conversion cycle (CCC) of Boeing Co. has exhibited fluctuating trends over the past five years. In 2019, the CCC stood at 368.14 days and increased by approximately 27% to reach 455.98 days in 2020. However, in 2021, there was a substantial increase of about 8% to 494.61 days before experiencing a decrease in 2022 to 454.30 days and another decrease in 2023 to 404.51 days.
A high CCC indicates inefficiency in the company's cash management as it takes an extended period to convert its resource inputs into cash flows from sales. Boeing Co. might be facing challenges in managing its inventory, receivables, and payables efficiently, which can lead to increased working capital requirements.
It's essential for Boeing Co. to closely monitor its inventory turnover, receivables collection period, and payables payment period to optimize its CCC and improve its cash flow management. Additionally, the company should focus on streamlining its operations and supply chain to reduce the time it takes to convert its investments in inventory and receivables into cash inflows, ultimately enhancing its overall financial performance.
Peer comparison
Dec 31, 2023