Eastman Chemical Company (EMN)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	102.32	85.93	81.88	68.83	77.46
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	102.32	85.93	81.88	68.83	77.46

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.32 + — – —
= 102.32

The cash conversion cycle of Eastman Chemical Company has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 77.46 days, indicating the average number of days it takes for Eastman Chemical Company to convert its investments in raw materials into cash flows from sales.

By December 31, 2021, the cash conversion cycle decreased to 68.83 days, suggesting an improvement in the efficiency of Eastman Chemical Company's working capital management. However, there was a reversal in the trend by December 31, 2022, with the cash conversion cycle increasing to 81.88 days. This increase may signal potential challenges in managing inventory, accounts receivable, and accounts payable effectively.

Furthermore, as of December 31, 2023, the cash conversion cycle extended to 85.93 days, indicating a further delay in converting investments into cash flows. This prolonged cycle may have implications for the company's liquidity and overall financial health.

By December 31, 2024, the cash conversion cycle reached its highest point at 102.32 days, signifying a significant increase in the time taken for Eastman Chemical Company to complete the cash conversion process. This prolonged cycle could potentially strain the company's cash flows and working capital management.

Overall, the fluctuations in Eastman Chemical Company's cash conversion cycle over the years highlight the importance of closely monitoring and managing working capital efficiency to ensure optimal financial performance and liquidity.