Church & Dwight Company Inc (CHD)
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 | 68.26 | 75.51 | 66.77 | 67.43 | 64.18 |
| Days of sales outstanding (DSO) | days | 32.77 | 28.65 | 28.52 | 29.73 | 29.85 |
| Number of days of payables | days | 70.19 | 77.86 | 82.79 | 80.05 | 72.78 |
| Cash conversion cycle | days | 30.85 | 26.31 | 12.50 | 17.11 | 21.26 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.26 + 32.77 – 70.19
= 30.85
The cash conversion cycle of Church & Dwight Co., Inc. has fluctuated over the past five years, indicating varying efficiency in managing its working capital.
In 2023, the company's cash conversion cycle was 30.85 days, indicating a longer period to convert its investments in inventory and receivables into cash. This may suggest that the company took longer to collect cash from its sales and manage its inventory, impacting its liquidity position.
Compared to 2022, when the cash conversion cycle was 26.31 days, the company experienced a lengthening of this cycle in 2023, which could be a cause for concern as it may tie up more of the company's funds in working capital.
In 2021, the cash conversion cycle was 12.50 days, reflecting a significant improvement in efficiency in converting its resources into cash. This indicates that the company was able to collect cash from sales and manage its inventory more effectively during that period.
Similarly, in 2020 and 2019, the cash conversion cycles were 17.11 days and 21.26 days, respectively, showing a relatively moderate efficiency in working capital management during those years.
Overall, fluctuations in the cash conversion cycle of Church & Dwight Co., Inc. over the five-year period suggest the company's changing ability to efficiently manage its working capital, impacting its cash flow and liquidity position.
Peer comparison
Dec 31, 2023