Bristol-Myers Squibb Company (BMY)

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	34.66	30.01	24.66	64.30	193.98
Days of sales outstanding (DSO)	days	88.57	78.17	73.72	72.98	107.29
Number of days of payables	days	42.43	39.01	34.71	84.11	110.48
Cash conversion cycle	days	80.80	69.18	63.67	53.17	190.79

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.66 + 88.57 – 42.43
= 80.80

The cash conversion cycle of Bristol-Myers Squibb Co. has fluctuated over the past five years, indicating varying efficiency in managing its working capital. In 2019, the company had a significantly extended cash conversion cycle of 190.79 days, reflecting potential inefficiencies in cash management, inventory turnover, and accounts receivable collection. However, there has been a noticeable improvement since then, with the cycle decreasing to 42.36 days in 2021, showing enhanced working capital management.

In 2022, there was a slight increase to 52.93 days, which suggests a longer period to convert inputs into cash. The most recent data for 2023 shows a further increase to 68.19 days, signaling a potential need for Bristol-Myers Squibb Co. to focus on optimizing its cash flow cycle going forward. It is essential for the company to continue monitoring and improving its operational efficiency to reduce the cash conversion cycle, ensuring better liquidity and financial health in the future.