Inter Parfums Inc (IPAR)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	102.55	283.58	269.82	225.06	278.34
Days of sales outstanding (DSO)	days	70.71	70.62	76.09	70.47	87.14
Number of days of payables	days	25.11	74.28	82.24	92.76	62.35
Cash conversion cycle	days	148.16	279.92	263.67	202.77	303.13

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.55 + 70.71 – 25.11
= 148.16

Inter Parfums Inc's cash conversion cycle has fluctuated over the past five years. In December 2020, the company had a cash conversion cycle of 303.13 days, indicating that it took over 10 months to convert its investments in inventory and accounts receivable into cash.

By December 2021, Inter Parfums Inc managed to significantly improve its cash conversion cycle to 202.77 days, suggesting a more efficient management of its working capital. However, in December 2022, the cash conversion cycle increased to 263.67 days, indicating a slight deterioration in efficiency compared to the previous year.

In the following year, December 2023, the cash conversion cycle grew further to 279.92 days, signaling a continued challenge in converting investments into cash. Notably, by December 2024, the cash conversion cycle saw a substantial improvement to 148.16 days, reflecting enhanced efficiency in managing inventories and receivables.

Overall, Inter Parfums Inc's cash conversion cycle demonstrates variability over the years, underscoring the importance of closely monitoring working capital management to optimize cash flow and operational efficiency.