Ingredion Incorporated (INGR)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.73 | 79.40 | 77.04 | 79.75 | 82.55 | 84.01 | 89.98 | 92.12 | 90.34 | 87.17 | 84.34 | 82.00 | 76.90 | 74.72 | 75.80 | 72.88 | 70.99 | 70.51 | 65.95 | 63.88 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 78.73 | 79.40 | 77.04 | 79.75 | 82.55 | 84.01 | 89.98 | 92.12 | 90.34 | 87.17 | 84.34 | 82.00 | 76.90 | 74.72 | 75.80 | 72.88 | 70.99 | 70.51 | 65.95 | 63.88 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.73 + — – —
= 78.73
The cash conversion cycle of Ingredion Incorporated has experienced fluctuations over the observed periods. The cycle, which represents the time taken by the company to convert its investments in inventory and other resources into cash flows from sales, was 63.88 days as of March 31, 2020, and reached its peak at 92.12 days on March 31, 2023.
Generally, a shorter cash conversion cycle is desirable as it indicates that a company is able to efficiently manage its working capital and liquidity. However, the trend in Ingredion's cash conversion cycle shows a gradual increase over time, reaching 78.73 days on December 31, 2024.
The company should carefully monitor and manage its inventory levels, accounts receivable collection processes, and accounts payable obligations to optimize its cash conversion cycle. An increasing cycle may suggest inefficiencies in managing these key components of working capital, which can impact the company's profitability and financial health. Further analysis of the underlying factors contributing to the prolonged cycle is warranted to identify areas for improvement and enhance overall operational efficiency.
Peer comparison
Dec 31, 2024