Keurig Dr Pepper Inc (KDP)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	36.52	40.81	38.12	36.77	34.68	40.13	40.18	40.50	39.31	44.00	40.54	36.05	31.39	36.38	34.12	32.19	29.24	32.18	29.10	26.89
Days of sales outstanding (DSO)	days	41.12	40.51	38.78	37.13	38.76	36.20	37.58	42.95	45.95	44.12	40.64	38.08	36.51	39.09	36.84	37.44	37.88	37.70	36.79	37.77
Number of days of payables	days	83.93	94.64	94.35	97.33	109.23	121.77	133.58	144.05	155.73	161.66	161.98	155.61	151.55	152.41	151.22	148.17	143.50	137.37	131.53	127.66
Cash conversion cycle	days	-6.28	-13.32	-17.45	-23.43	-35.79	-45.43	-55.82	-60.59	-70.47	-73.55	-80.80	-81.47	-83.65	-76.94	-80.26	-78.53	-76.38	-67.48	-65.64	-63.00

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.52 + 41.12 – 83.93
= -6.28

The cash conversion cycle of Keurig Dr Pepper Inc has shown a consistent improvement over the observed period from March 31, 2020, to December 31, 2024. The company has effectively managed its working capital and operational efficiency, resulting in a decreasing trend in the cash conversion cycle.

The cycle, which measures the period it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has decreased from -63.00 days on March 31, 2020, to -6.28 days on December 31, 2024.

This indicates that Keurig Dr Pepper has been able to streamline its production and sales processes, manage its inventory effectively, and collect receivables efficiently. The negative values signify that the company is able to receive cash from customers before it needs to pay its suppliers and other obligations, reflecting a strong cash position and efficient working capital management.

Overall, the decreasing trend in the cash conversion cycle demonstrates that Keurig Dr Pepper Inc has enhanced its liquidity position and operational efficiency over the analyzed period.