Corteva Inc (CTVA)

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 181.93 165.79 144.99 167.72 173.70 140.28 110.78 135.27 143.76 133.84 110.54 135.34 153.93 138.98 113.20 138.72 132.13
Days of sales outstanding (DSO) days 116.28 138.50 165.63 178.57 119.21 133.83 151.81 165.16 112.17 138.05 166.66 171.69 126.47 146.78 176.04 171.66 145.73
Number of days of payables days 112.87 96.48 87.05 100.78 124.84 107.25 94.45 99.97 114.51 106.42 95.84 97.04 113.98 95.13 91.19 95.22 97.20
Cash conversion cycle days 185.35 207.80 223.56 245.50 168.08 166.86 168.15 200.45 141.42 165.47 181.36 210.00 166.42 190.63 198.06 215.15 180.65

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 181.93 + 116.28 – 112.87
= 185.35

The cash conversion cycle of Corteva Inc has shown fluctuations over the eight quarters presented. Generally, a lower cash conversion cycle is favorable as it indicates that the company is efficiently managing its operating cycle to generate cash flow.

In Q1 2022, the cash conversion cycle was 215.02 days, which decreased to 174.70 days by Q2 2022, reflecting an improvement in efficiency. However, in Q3 2022, there was a slight increase to 179.64 days before dropping again in Q4 2022 to 186.23 days.

The trend reversed in Q1 2023, where the cash conversion cycle increased significantly to 270.07 days, which is a cause for concern as it suggests a delay in converting inventory into sales and ultimately into cash. This trend continued in Q2 2023 and Q3 2023, with the cash conversion cycle further increasing to 245.35 days and 234.32 days, respectively.

In Q4 2023, there was a slight improvement in the cash conversion cycle to 212.65 days compared to the previous quarter, but it remains higher than the levels seen in earlier quarters. Overall, Corteva Inc should focus on improving its working capital management and operational efficiency to reduce the cash conversion cycle and enhance its cash flow generation.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
Corteva Inc
CTVA
185.35
Fresh Del Monte Produce Inc
FDP
73.89