Church & Dwight Company Inc (CHD)
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 | 67.49 | 68.26 | 75.51 | 66.77 | 67.43 |
| Days of sales outstanding (DSO) | days | 35.91 | 32.77 | 28.65 | 28.52 | 29.73 |
| Number of days of payables | days | 77.59 | 70.19 | 77.86 | 82.79 | 80.05 |
| Cash conversion cycle | days | 25.81 | 30.85 | 26.31 | 12.50 | 17.11 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.49 + 35.91 – 77.59
= 25.81
The cash conversion cycle (CCC) for Church & Dwight Company Inc has shown fluctuation over the past five years. In 2020, the company's cash conversion cycle was 17.11 days, indicating that it took approximately 17 days to convert raw materials into cash through sales. Subsequently, the CCC decreased to 12.50 days by the end of 2021, reflecting an improvement in the efficiency of the company's working capital management.
However, the CCC significantly increased to 26.31 days by the end of 2022 and further rose to 30.85 days by the end of 2023, suggesting a potential slowdown in the conversion of inventory, accounts receivable, and accounts payable into cash. This prolonged cycle may be due to various factors such as delays in sales collections, inventory management issues, or extended payment terms with suppliers.
In the most recent year, 2024, the company managed to slightly improve its cash conversion cycle to 25.81 days, although it remains higher compared to the earlier years analyzed. Church & Dwight Company Inc should continue monitoring and optimizing its cash conversion cycle to ensure efficient utilization of resources and maintain healthy cash flows.
Peer comparison
Dec 31, 2024