International Paper (IP)
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 | 45.31 | 61.93 | 58.42 | 57.58 | 57.22 | 58.22 | 55.29 | 49.18 | 50.88 | 57.38 | 52.48 | 55.68 | 49.48 | 58.94 | 58.02 | 55.38 | 85.34 | 84.88 | 143.12 | 136.21 |
| Days of sales outstanding (DSO) | days | 59.46 | 58.43 | 57.45 | 56.51 | 57.37 | 60.45 | 59.63 | 56.92 | 54.26 | 59.16 | 61.87 | 59.95 | 55.26 | 54.03 | 53.37 | 54.20 | 54.42 | 53.73 | 55.73 | 44.33 |
| Number of days of payables | days | 58.57 | 75.86 | 73.19 | 75.45 | 79.79 | 78.61 | 78.05 | 74.84 | 73.09 | 75.57 | 73.64 | 71.70 | 61.92 | 65.37 | 63.68 | 65.80 | 93.65 | 90.87 | 160.75 | 149.05 |
| Cash conversion cycle | days | 46.20 | 44.50 | 42.68 | 38.64 | 34.79 | 40.06 | 36.87 | 31.26 | 32.05 | 40.97 | 40.71 | 43.93 | 42.82 | 47.60 | 47.71 | 43.77 | 46.11 | 47.74 | 38.09 | 31.48 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.31 + 59.46 – 58.57
= 46.20
The cash conversion cycle of International Paper Co. has fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 44.22 days, showing a slight improvement compared to the previous quarter at 46.47 days. This indicates that the company took slightly less time to convert its investments in inventory and accounts receivable into cash during this period.
However, when compared to the same quarter in the previous year, the cash conversion cycle has increased from 38.18 days to 44.22 days in Q4 2023. This suggests that International Paper Co. may be facing challenges in managing its working capital efficiently, leading to a longer cash conversion cycle.
Overall, the trend in the cash conversion cycle shows some variability, with improvements in some quarters and deterioration in others. It is essential for the company to focus on optimizing its inventory and accounts receivable management to shorten the cash conversion cycle and improve its cash flow efficiency in the long term.
Peer comparison
Dec 31, 2023