Keurig Dr Pepper Inc (KDP)

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	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	26.19	30.07	26.89	28.26
Days of sales outstanding (DSO)	days	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	41.33	40.66	40.01	41.38
Number of days of payables	days	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	127.19	119.16	114.04	109.02
Cash conversion cycle	days	-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	-59.67	-48.43	-47.13	-39.39

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.68 + 38.76 – 109.23
= -35.79

The cash conversion cycle of Keurig Dr Pepper Inc has shown improvement over the last four quarters. In Q4 2023, the company's cash conversion cycle was -95.64 days, the highest value among all quarters analyzed. This means that on average, it took Keurig Dr Pepper Inc approximately 95.64 days to convert its investments in inventory and other resources into cash receipts from sales.

The trend of decreasing values from Q4 2023 to Q1 2023 (-146.80 days) indicated that the company was able to manage its working capital more efficiently, resulting in a more rapid conversion of resources into cash. Notably, Q1 2023 marked the lowest cash conversion cycle during the period analyzed.

Compared to the same quarter in the previous year, the company has made significant progress in managing its cash conversion cycle. In Q4 2022, the cash conversion cycle was -167.65 days, showing a substantial improvement by the Q4 2023.

Overall, the decreasing trend in the cash conversion cycle indicates that Keurig Dr Pepper Inc has been able to streamline its operations, manage its working capital effectively, and convert its resources into cash more efficiently in recent quarters, thereby enhancing its liquidity position.