International Business Machines (IBM)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.11 | 18.40 | 16.07 | 15.38 | 18.57 | 19.96 | 21.10 | 20.35 | 23.40 | 22.39 | 24.40 | 23.27 | 46.69 | 37.12 | 32.04 | 27.20 | 29.15 | 27.33 | 25.37 | 22.57 |
| Days of sales outstanding (DSO) | days | 43.34 | 36.78 | 39.26 | 45.58 | 36.04 | 38.40 | 76.07 | 85.68 | 37.92 | 40.53 | 85.84 | 95.32 | 125.74 | 123.17 | 115.45 | 123.95 | 117.32 | 126.60 | 132.11 | 150.48 |
| Number of days of payables | days | 53.53 | 44.08 | 47.56 | 54.72 | 44.35 | 49.62 | 49.08 | 53.11 | 49.65 | 49.30 | 47.44 | 55.81 | 104.89 | 86.57 | 72.56 | 60.54 | 59.61 | 69.00 | 59.27 | 68.26 |
| Cash conversion cycle | days | 6.92 | 11.10 | 7.76 | 6.23 | 10.25 | 8.74 | 48.09 | 52.92 | 11.67 | 13.62 | 62.80 | 62.78 | 67.54 | 73.72 | 74.93 | 90.61 | 86.86 | 84.93 | 98.21 | 104.80 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.11 + 43.34 – 53.53
= 6.92
The cash conversion cycle (CCC) of International Business Machines (IBM) has shown a decreasing trend over the years based on the provided data. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From December 31, 2019, where the CCC was 104.80 days, to December 31, 2024, where it decreased to 6.92 days, there is a significant improvement in IBM's efficiency in managing its working capital. This implies that IBM has been able to streamline its operations and accelerate the conversion of its resources into cash.
The decreasing trend in IBM's CCC indicates that the company has been able to efficiently manage its inventory, collect receivables, and extend payables more effectively over the years. A lower CCC suggests that IBM is able to generate cash flows more rapidly, improving its liquidity position and overall financial health.
The sharp decrease in the CCC from June 30, 2022, to March 31, 2023, suggests that IBM made significant improvements in its working capital management practices during that period. However, the slight increase in the CCC from December 31, 2023, to December 31, 2024, indicates that IBM may have faced some challenges or changes in its operations that affected its cash conversion cycle.
Overall, the decreasing trend in IBM's CCC is a positive sign of the company's efficiency in managing its working capital and generating cash flows from its operational activities.
Peer comparison
Dec 31, 2024
See also:
International Business Machines Cash Conversion Cycle (Quarterly Data)