Ford Motor Company (F)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 35.24 | 40.71 | 40.24 | 38.01 | 34.37 | 36.98 | 34.98 | 39.51 | 32.49 | 37.66 | 37.67 | 36.90 | 30.90 | 29.94 | 28.54 | 27.95 | 26.00 | 32.42 | 31.95 | 31.25 |
| Days of sales outstanding (DSO) | days | 128.30 | 121.51 | 123.02 | 122.44 | 125.74 | 117.07 | 112.82 | 124.22 | 117.56 | 117.81 | 115.28 | 144.56 | 150.41 | 144.88 | 145.07 | 149.81 | 147.24 | 142.79 | 148.84 | 155.13 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 163.54 | 162.22 | 163.26 | 160.45 | 160.11 | 154.04 | 147.80 | 163.74 | 150.05 | 155.48 | 152.95 | 181.46 | 181.31 | 174.82 | 173.61 | 177.75 | 173.23 | 175.21 | 180.79 | 186.38 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 35.24 + 128.30 – —
= 163.54
The cash conversion cycle of Ford Motor Co. has fluctuated over the past eight quarters, ranging from a low of 2.01 days in Q3 2022 to a high of 9.55 days in Q2 2022. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In the most recent quarter, Q4 2023, the cash conversion cycle was 7.25 days, indicating a moderate efficiency in managing the company's working capital. It has slightly decreased compared to the previous quarter, Q3 2023, where the cycle was 8.22 days.
During Q2 2022, the cash conversion cycle significantly increased to 9.55 days, suggesting potential issues in managing inventory, collecting receivables, or paying suppliers. However, in the following quarters, the company was able to improve its efficiency in this aspect, as shown by lower cycles in Q3 2022 and Q1 2023.
Overall, Ford Motor Co. should aim to continuously monitor and optimize its cash conversion cycle to ensure effective management of working capital and maximize cash flow efficiency.
Peer comparison
Dec 31, 2023