Darling Ingredients Inc (DAR)
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 | 38.63 | 44.52 | 41.70 | 39.67 | 42.88 |
| Days of sales outstanding (DSO) | days | 1.21 | 0.47 | 39.65 | 36.69 | 42.72 |
| Number of days of payables | days | 23.35 | 24.97 | 29.25 | 26.63 | 26.97 |
| Cash conversion cycle | days | 16.48 | 20.02 | 52.10 | 49.73 | 58.63 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.63 + 1.21 – 23.35
= 16.48
The cash conversion cycle of Darling Ingredients Inc has shown a decreasing trend over the past five years, indicating an improvement in the company's efficiency in managing its working capital.
As of December 31, 2020, the cash conversion cycle was 58.63 days, which decreased to 49.73 days by December 31, 2021. There was a slight uptick to 52.10 days by December 31, 2022, before experiencing a significant reduction to 20.02 days by December 31, 2023, and further to 16.48 days by December 31, 2024.
The decreasing trend in the cash conversion cycle signifies that Darling Ingredients Inc has been able to shorten the time it takes to convert its inventory into cash, indicating more efficient management of accounts receivable and inventory levels. This improvement can positively impact the company's cash flows, liquidity, and overall financial performance.
Peer comparison
Dec 31, 2024