Berry Global Group Inc (BERY)

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	55.36	50.33	54.48	56.61	54.34	49.58	53.35	53.20	56.96	55.39	54.84	52.82	52.55	45.26	46.28	53.15	62.37	66.57	48.93	51.44
Days of sales outstanding (DSO)	days	43.74	45.07	48.83	—	42.01	44.54	—	—	—	49.53	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	37.07	49.40	36.50	41.00	34.53	49.39	40.94	44.72	44.15	59.28	49.19	47.80	41.71	39.80	34.45	47.90	46.91	58.28	33.03	36.38
Cash conversion cycle	days	62.03	46.01	66.82	15.61	61.82	44.74	12.41	8.48	12.81	45.63	5.66	5.01	10.84	5.46	11.83	5.25	15.46	8.30	15.89	15.06

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.36 + 43.74 – 37.07
= 62.03

The cash conversion cycle of Berry Global Group Inc has shown fluctuations over the past five years, indicating varying efficiency in managing its cash flow and working capital.

From March 2019 to September 2020, the company experienced a decreasing trend in its cash conversion cycle, reaching a low of 5.01 days in March 2020. This suggests that Berry Global was able to efficiently convert its inventory into cash and collect receivables promptly during this period.

However, there was a significant increase in the cash conversion cycle from September 2020 to June 2021, peaking at 45.63 days in September 2021. This spike indicates potential challenges in managing working capital, possibly due to slower inventory turnover or longer accounts receivable collection periods.

Subsequently, from June 2021 to September 2023, the company made strides in improving its cash conversion cycle, with periods of lower days indicating enhanced efficiency in working capital management. Notably, there was a substantial improvement from June 2022 to March 2023, where the cycle decreased from 12.41 days to 5.25 days, reflecting better control over inventory and receivables.

Overall, the fluctuations in Berry Global's cash conversion cycle suggest that the company has experienced changes in its operational efficiency and effectiveness in managing working capital over the analyzed period. It is essential for the company to monitor and optimize its cash conversion cycle continuously to ensure optimal cash flow and liquidity management.