Darling Ingredients Inc (DAR)
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 | 45.56 | 47.90 | 47.44 | 49.06 | 41.76 | 43.41 | 43.55 | 40.19 | 39.67 | 42.95 | 40.84 | 42.93 | 42.88 | 45.22 | 43.84 | 42.37 | 40.53 | 39.49 | 39.24 | 38.20 |
| Days of sales outstanding (DSO) | days | 0.47 | 40.76 | 40.47 | — | 39.63 | — | — | — | 36.67 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 25.55 | 22.98 | 24.55 | — | 29.29 | — | — | — | 26.63 | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 20.47 | 65.68 | 63.35 | 49.06 | 52.10 | 43.41 | 43.55 | 40.19 | 49.71 | 42.95 | 40.84 | 42.93 | 42.88 | 45.22 | 43.84 | 42.37 | 40.53 | 39.49 | 39.24 | 38.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.56 + 0.47 – 25.55
= 20.47
The cash conversion cycle of Darling Ingredients Inc has varied over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates better liquidity and efficiency in managing working capital.
Looking at the data provided, we can see that the cash conversion cycle fluctuated throughout the periods but generally remained below 70 days, indicating that Darling Ingredients Inc has been efficient in managing its working capital. In the most recent quarter, the cash conversion cycle was 20.47 days, showing an improvement in efficiency compared to the previous quarters.
It's worth noting that a decreasing trend in the cash conversion cycle is generally a positive sign, as it signifies that the company is managing its resources effectively and collecting cash from sales more quickly. However, isolated fluctuations in the cycle should be analyzed in conjunction with other financial metrics and industry benchmarks to assess the overall financial health and operational efficiency of the company.
Peer comparison
Dec 31, 2023