Inter Parfums Inc (IPAR)

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	283.58	269.82	225.06	278.34	228.92
Days of sales outstanding (DSO)	days	70.62	76.09	70.47	87.14	69.18
Number of days of payables	days	74.28	82.24	92.76	62.35	73.80
Cash conversion cycle	days	279.92	263.67	202.77	303.13	224.30

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 283.58 + 70.62 – 74.28
= 279.92

Inter Parfums, Inc.'s cash conversion cycle has shown diverse trends over the past five years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In 2023, the cash conversion cycle increased to 279.93 days compared to the previous year, indicating that the company took longer to convert its investments into cash.

In 2022, there was a slight improvement in the cash conversion cycle to 263.69 days, which suggests a more efficient management of inventory and receivables. The most significant improvement was seen in 2021 when the cash conversion cycle decreased to 202.76 days, indicating a better liquidity position and faster conversion of assets into cash.

On the contrary, in 2020, the cash conversion cycle increased drastically to 303.12 days, signifying potential issues with inventory management or delays in collecting receivables. In 2019, there was a notable improvement as the cash conversion cycle reduced to 224.29 days, indicating better efficiency in converting investments into cash.

Overall, Inter Parfums, Inc.'s cash conversion cycle has fluctuated over the years, pointing to varying levels of efficiency in managing the company's resources and cash flows. Further analysis of the components of the cash conversion cycle, such as inventory turnover and accounts receivable collection period, could provide more insights into the company's operational and financial performance.