Crown Holdings Inc (CCK)
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 | 51.82 | 59.75 | 51.75 | 41.88 | 60.32 |
| Days of sales outstanding (DSO) | days | 54.41 | 53.25 | 62.02 | 49.28 | 47.81 |
| Number of days of payables | days | 78.99 | 82.27 | 86.53 | 71.00 | 98.16 |
| Cash conversion cycle | days | 27.23 | 30.74 | 27.24 | 20.16 | 9.97 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.82 + 54.41 – 78.99
= 27.23
The cash conversion cycle of Crown Holdings, Inc. has fluctuated over the past five years, indicating varying efficiency in managing its cash flows and operations.
In 2019, the company's cash conversion cycle was at its lowest at 7.99 days, reflecting a quick turnover of cash from inventory, to accounts receivable, and back into cash. This suggested that Crown Holdings was converting its resources into sales and cash rapidly.
However, in 2020, there was a notable increase in the cash conversion cycle to 9.64 days, potentially signaling a slowdown in the conversion of inventory to cash. The company may have faced challenges in managing its working capital efficiently during this period.
By 2021, there was a significant improvement as the cash conversion cycle decreased to 13.38 days, indicating a more effective management of the cycle. This improvement may have been driven by better inventory management and faster collection of accounts receivable.
Subsequently, in 2022, the cash conversion cycle increased to 25.94 days, which may suggest that Crown Holdings faced difficulties in converting its resources back into cash within a shorter period. This could be a result of delays in inventory turnover or longer collection periods for accounts receivable.
In 2023, there was a slight improvement in the cash conversion cycle to 19.90 days, although it remained higher compared to the earlier years. Crown Holdings may need to focus on optimizing its working capital processes to ensure a more efficient cash conversion cycle in the future.
Peer comparison
Dec 31, 2023