Ford Motor Company (F)

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	31.57	35.18	34.36	32.54	30.83
Days of sales outstanding (DSO)	days	131.35	128.49	125.74	117.56	150.41
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	162.92	163.68	160.10	150.10	181.24

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.57 + 131.35 – —
= 162.92

Based on the provided data, the cash conversion cycle of Ford Motor Company has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 181.24 days, indicating that it takes on average 181.24 days for Ford to convert its investments in inventory and other inputs into cash flows from sales.

Subsequently, the cash conversion cycle decreased to 150.10 days by December 31, 2021, implying an improvement in efficiency in managing its working capital. However, by the end of 2022, the cycle increased slightly to 160.10 days, suggesting a longer period required to convert investments into cash.

By December 31, 2023, the cash conversion cycle further increased to 163.68 days, indicating a potential challenge in managing the company's working capital efficiently. Lastly, as of December 31, 2024, the cycle decreased slightly to 162.92 days, but still remained higher compared to the previous year.

Overall, Ford Motor Company has experienced fluctuations in its cash conversion cycle over the five-year period, with some improvements in efficiency and some challenges in managing working capital effectively. It is important for the company to continuously monitor and optimize its cash conversion cycle to ensure smooth operations and maximize profitability.