Crown Holdings Inc (CCK)
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 | 45.72 | 51.82 | 59.75 | 51.75 | 41.88 |
| Days of sales outstanding (DSO) | days | 50.20 | 54.41 | 53.25 | 62.02 | 49.28 |
| Number of days of payables | days | 76.99 | 78.99 | 82.27 | 86.53 | 71.00 |
| Cash conversion cycle | days | 18.93 | 27.23 | 30.74 | 27.24 | 20.16 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.72 + 50.20 – 76.99
= 18.93
The cash conversion cycle of Crown Holdings Inc has shown fluctuations over the past five years, ranging from 18.93 days to 30.74 days. In December 31, 2020, the cash conversion cycle was 20.16 days, indicating the company was able to efficiently convert its investments in inventory and accounts receivable into cash within a relatively short period. However, by December 31, 2022, the cash conversion cycle extended to 30.74 days, suggesting a delay in converting inventory and receivables into cash.
This increase in the cash conversion cycle could be a result of a lengthening of the company's inventory turnover or collection period for accounts receivable, negatively impacting its liquidity and operational efficiency. On the positive side, the cash conversion cycle decreased to 18.93 days by December 31, 2024, indicating an improvement in managing working capital and cash flow.
Overall, fluctuations in the cash conversion cycle reflect changes in Crown Holdings Inc's ability to efficiently manage its working capital components. It is important for the company to focus on optimizing inventory levels and streamlining accounts receivable processes to enhance its liquidity and operational performance.
Peer comparison
Dec 31, 2024