Dow Inc (DOW)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 59.02 60.52 58.36 57.14 52.39 52.40 51.44 50.76 50.43 53.35 58.76 57.85 58.11 60.17 64.45 63.02 62.40 62.17 62.21 64.58
Days of sales outstanding (DSO) days 58.31 61.84 60.05 59.27 54.10 58.75 56.76 53.31 49.74 52.41 58.98 62.30 63.44 66.93 71.96 74.20 69.98 67.86 64.25 66.54
Number of days of payables days 58.99 63.28 62.97 60.85 54.55 53.30 48.88 48.79 52.08 53.60 60.85 63.67 66.34 63.44 67.70 67.24 64.46 59.46 54.12 57.02
Cash conversion cycle days 58.34 59.09 55.44 55.55 51.95 57.85 59.31 55.28 48.10 52.16 56.90 56.48 55.21 63.67 68.72 69.99 67.93 70.57 72.34 74.09

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.02 + 58.31 – 58.99
= 58.34

The cash conversion cycle of Dow Inc has been showing a declining trend over the past few years. The cycle represents the amount of time it takes for the company to convert its investments in inventory into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle decreased from 74.09 days to 58.34 days. This indicates that Dow Inc has been able to improve its efficiency in managing its working capital, reducing the time it takes to sell inventory, collect receivables, and pay suppliers.

A lower cash conversion cycle signifies that the company is able to generate cash more quickly, potentially leading to improved liquidity and financial performance. It could also suggest that Dow Inc is effectively managing its inventory levels and operating efficiently in terms of sales and collection activities.

Overall, the decreasing trend in the cash conversion cycle for Dow Inc is a positive indicator of its operational efficiency and financial management, demonstrating an ability to convert investments into cash more swiftly over time.