Ingredion Incorporated (INGR)
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 | 81.66 | 83.18 | 89.24 | 91.29 | 89.50 | 85.98 | 83.38 | 80.97 | 71.26 | 68.65 | 68.92 | 65.78 | 68.70 | 64.15 | 61.38 | 60.96 | 62.80 | 94.50 | 92.75 | 91.65 |
| Days of sales outstanding (DSO) | days | 57.21 | 61.23 | 60.69 | 64.84 | 64.81 | 66.53 | 68.36 | 72.67 | 59.70 | 61.02 | 64.15 | 61.76 | 61.64 | 56.07 | 53.28 | 60.76 | 60.85 | 62.41 | 64.66 | 63.84 |
| Number of days of payables | days | 43.82 | — | — | — | 48.92 | — | — | — | 47.06 | — | — | — | 44.88 | — | — | — | 36.76 | — | — | — |
| Cash conversion cycle | days | 95.06 | 144.41 | 149.92 | 156.13 | 105.39 | 152.50 | 151.73 | 153.65 | 83.90 | 129.68 | 133.07 | 127.54 | 85.46 | 120.23 | 114.66 | 121.73 | 86.89 | 156.92 | 157.41 | 155.49 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.66 + 57.21 – 43.82
= 95.06
The cash conversion cycle of Ingredion Inc has fluctuated over the past eight quarters. In Q1 2023, the company's cash conversion cycle was the shortest at 95.47 days, indicating that it took Ingredion approximately 95 days to convert its investments in inventory and accounts payable into cash. This was followed by a gradual increase in the cash conversion cycle in Q2 and Q3 2023, reaching 150.67 days in Q2 and 145.24 days in Q3.
However, there was a significant improvement in the cash conversion cycle in Q4 2023, dropping to 95.47 days. This suggests that Ingredion was able to more efficiently manage its working capital in the last quarter of the year, potentially through better inventory and accounts receivable management.
Comparing Q4 2023 to Q4 2022, there was also an improvement as the cash conversion cycle decreased from 105.77 days in Q4 2022 to 95.47 days in Q4 2023. This signifies a positive trend in the company's working capital management efficiency over the year.
Overall, the fluctuation in Ingredion's cash conversion cycle over the quarters indicates varying degrees of efficiency in managing its working capital. The company should continue to focus on optimizing its inventory turnover and accounts receivable collection processes to further improve its cash conversion cycle in the future.
Peer comparison
Dec 31, 2023