Ball Corporation (BALL)
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 | 47.13 | 58.67 | 55.25 | 48.94 | 45.17 |
| Days of sales outstanding (DSO) | days | 62.84 | 62.89 | 68.59 | 54.84 | 52.59 |
| Number of days of payables | days | 113.44 | 118.01 | 146.49 | 124.08 | 111.18 |
| Cash conversion cycle | days | -3.48 | 3.56 | -22.64 | -20.29 | -13.42 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.13 + 62.84 – 113.44
= -3.48
The cash conversion cycle represents the efficiency of a company in managing its working capital by measuring the time it takes to convert raw materials into cash received from sales. A negative cash conversion cycle indicates that Ball Corp. is able to generate cash from its operational activities before having to pay its suppliers.
Over the past five years, Ball Corp. has shown a mixed performance in its cash conversion cycle. In 2023, the company significantly improved its working capital management with a cash conversion cycle of -9.78 days, indicating that the company is able to collect cash from customers and pay suppliers more efficiently compared to the previous year. This improvement may be attributed to streamlined operational processes or better inventory management.
In 2022, Ball Corp. also demonstrated a negative cash conversion cycle of -1.33 days, suggesting a relatively efficient working capital management system. However, in 2021, the company experienced a significant decrease in efficiency with a cash conversion cycle of -29.94 days, which improved slightly compared to 2020's cash conversion cycle of -27.47 days.
Despite the fluctuations, Ball Corp. has been able to maintain a negative cash conversion cycle over the past five years, indicating a generally efficient working capital management system. It is important for the company to continue monitoring and improving its cash conversion cycle to ensure optimal utilization of resources and maximize profitability.
Peer comparison
Dec 31, 2023