International Flavors & Fragrances Inc (IFF)

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	63.61	80.18	79.17	99.39	99.34
Days of sales outstanding (DSO)	days	57.26	54.76	61.20	68.52	63.97
Number of days of payables	days	35.39	36.08	48.21	48.82	45.15
Cash conversion cycle	days	85.48	98.85	92.16	119.09	118.17

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.61 + 57.26 – 35.39
= 85.48

The cash conversion cycle of International Flavors & Fragrances Inc. has shown fluctuations over the past five years, ranging from 112.27 days to 150.68 days.

In 2023, the cash conversion cycle decreased to 112.27 days from 144.00 days in 2022, indicating an improvement in the company's ability to convert its investments in raw materials and production into cash receipts from customers more efficiently.

Comparing the data for 2023 to the figures from 2021 and 2020, it is apparent that the company has managed its working capital more effectively, leading to a shorter cash conversion cycle. This suggests that International Flavors & Fragrances Inc. has enhanced its liquidity position and operational efficiency during the most recent period.

However, it is noteworthy that the cash conversion cycle slightly increased compared to 2021, suggesting possible challenges in managing receivables, inventory, and payables. The company should continue to focus on optimizing its working capital management to further improve its cash conversion cycle and overall financial performance.