Eastman Chemical Company (EMN)

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	85.93	81.88	68.83	77.46	86.18
Days of sales outstanding (DSO)	days	35.19	34.22	44.04	57.90	46.88
Number of days of payables	days	73.52	69.47	69.24	59.04	60.67
Cash conversion cycle	days	47.60	46.63	43.63	76.32	72.39

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 85.93 + 35.19 – 73.52
= 47.60

The cash conversion cycle of Eastman Chemical Co has shown fluctuations over the last five years. In 2023, the company's cash conversion cycle was 71.93 days, slightly higher compared to 2022 (68.91 days) and 2021 (67.68 days). This indicates that the company took slightly longer to convert its invested resources into cash in 2023.

However, in 2020 and 2019, the cash conversion cycle was significantly higher at 97.84 days and 94.15 days, respectively. This suggests that the company took longer to convert its inventory and receivables into cash during those years.

Overall, Eastman Chemical Co has shown some variability in its cash conversion cycle in recent years, with different levels of efficiency in managing its working capital. It would be important for the company to analyze the reasons behind these fluctuations and work towards optimizing its cash conversion cycle for improved financial health and operational efficiency.