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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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