Dupont De Nemours Inc (DD)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	72.40	80.10	56.57	46.64	87.16
Days of sales outstanding (DSO)	days	71.60	69.78	46.93	43.32	64.51
Number of days of payables	days	56.48	72.33	57.00	43.31	59.21
Cash conversion cycle	days	87.52	77.55	46.50	46.66	92.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.40 + 71.60 – 56.48
= 87.52

DuPont de Nemours Inc's cash conversion cycle has fluctuated over the past five years, indicating changes in the efficiency of its working capital management. The cycle increased from 67.87 days in 2021 to 93.67 days in 2023, reflecting a potential delay in converting resources into cash.

The cash conversion cycle measures the time taken to convert investments in inventory and accounts receivable into cash receipts from customers. A longer cycle suggests that the company is taking more time to generate cash from its operations, which could indicate issues with inventory management or collection of receivables.

The decrease in the cash conversion cycle from 2019 to 2021 indicates an improvement in efficiency during those years. However, the increase in the cycle in 2023 may warrant further investigation into the factors contributing to this lengthening period. Monitoring and managing the cash conversion cycle is crucial for maintaining liquidity and ensuring the company's operational efficiency.