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.
Peer comparison
Dec 31, 2024