Church & Dwight Company Inc (CHD)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.26 | 75.06 | 76.46 | 74.78 | 75.51 | 80.04 | 79.49 | 73.26 | 66.77 | 70.12 | 71.92 | 72.20 | 67.43 | 70.85 | 67.32 | 59.36 | 64.18 | 60.30 | 62.38 | 62.73 |
| Days of sales outstanding (DSO) | days | 32.77 | 29.13 | 29.84 | 28.45 | 28.65 | 26.91 | 27.93 | 28.31 | 28.52 | 29.03 | 27.93 | 29.81 | 29.73 | 28.68 | 27.38 | 28.81 | 29.85 | 32.72 | 33.06 | 33.55 |
| Number of days of payables | days | 70.19 | 77.31 | 76.72 | 74.58 | 77.86 | 77.70 | 80.00 | 80.14 | 82.79 | 78.34 | 73.35 | 73.00 | 80.05 | 82.68 | 76.36 | 69.02 | 72.78 | 69.63 | 72.94 | 68.27 |
| Cash conversion cycle | days | 30.85 | 26.88 | 29.58 | 28.65 | 26.31 | 29.24 | 27.43 | 21.44 | 12.50 | 20.81 | 26.51 | 29.00 | 17.11 | 16.85 | 18.33 | 19.15 | 21.26 | 23.39 | 22.50 | 28.00 |
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 is a measure of how efficiently a company is managing its working capital. It is calculated by adding the days inventory outstanding to the days sales outstanding and then subtracting the days payable outstanding. A lower number indicates a more efficient use of cash in the business operations.
Analyzing the data provided for Church & Dwight Co., Inc., we observed fluctuations in the cash conversion cycle over the last eight quarters. In Q4 2023, the company had a cash conversion cycle of 30.85 days, which increased from the previous quarter but remained relatively stable compared to the same quarter in the previous year.
The cash conversion cycle reached its lowest point in Q1 2022, with 21.44 days, which suggests the company was able to convert its investments in inventory back to cash relatively quickly during that period. However, this efficiency has decreased towards the end of 2023.
Overall, it is important for Church & Dwight Co., Inc. to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of resources and maximize liquidity. Tracking changes in the cycle can provide valuable insights into the company's operational efficiency and effectiveness in managing working capital.
Peer comparison
Dec 31, 2023