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.
Peer comparison
Dec 31, 2023