Bristol-Myers Squibb Company (BMY)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	29.38	34.66	30.01	24.66	64.30
Days of sales outstanding (DSO)	days	81.21	88.57	78.17	73.72	72.98
Number of days of payables	days	41.38	42.43	39.01	34.71	84.11
Cash conversion cycle	days	69.21	80.80	69.18	63.67	53.17

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.38 + 81.21 – 41.38
= 69.21

The cash conversion cycle of Bristol-Myers Squibb Company has seen an upward trend over the past five years, increasing from 53.17 days as of December 31, 2020, to 69.21 days as of December 31, 2024. This indicates that the company's efficiency in managing its operating cycle has deteriorated over time, leading to a longer period between when cash is paid out for inventory and when cash is received from the sale of goods.

The increase in the cash conversion cycle suggests that Bristol-Myers Squibb may be experiencing challenges in controlling its inventory levels or facing delays in receiving payments from customers. A longer cash conversion cycle can tie up cash resources and potentially strain liquidity, impacting the company's overall financial health.

It is important for Bristol-Myers Squibb to closely monitor and manage its cash conversion cycle to optimize working capital efficiency and ensure that it maintains a healthy balance between cash inflows and outflows. By addressing the factors contributing to the prolonged cash conversion cycle, the company can enhance its cash flow management and operational effectiveness.