Interpublic Group of Companies Inc (IPG)
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 | 68.86 | 0.14 | 0.20 | 0.02 | 0.57 |
| Days of sales outstanding (DSO) | days | 268.09 | 245.13 | 268.20 | 260.51 | 255.09 |
| Number of days of payables | days | 194.85 | 190.19 | 221.18 | 189.16 | 178.72 |
| Cash conversion cycle | days | 142.09 | 55.08 | 47.23 | 71.37 | 76.94 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.86 + 268.09 – 194.85
= 142.09
The cash conversion cycle of Interpublic Group Of Cos., Inc. has shown some fluctuation over the past five years. In 2023, the cash conversion cycle increased to 268.09 days from 245.13 days in 2022, indicating that the company took longer to convert its investments in inventory and accounts receivable into cash during the year. This could suggest potential inefficiencies in managing its working capital.
Comparing 2023 with 2021, the cash conversion cycle remained relatively stable at 268.20 days, while there was a slight improvement from 2020 where the cycle was 260.51 days. However, the company had a more efficient cash conversion cycle in 2019, with a lower figure of 255.09 days.
Overall, Interpublic Group Of Cos., Inc. should focus on optimizing its cash conversion cycle to ensure it is operating efficiently and effectively managing its working capital. This may involve streamlining its inventory management processes, expediting accounts receivable collection, and managing payable periods effectively to enhance its overall liquidity position.
Peer comparison
Dec 31, 2023