Kraft Heinz Co (KHC)

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	44.04	57.16	55.48	41.01	36.71
Days of sales outstanding (DSO)	days	30.38	30.03	30.06	30.75	30.56
Number of days of payables	days	54.63	73.19	73.67	71.43	56.98
Cash conversion cycle	days	19.79	14.01	11.87	0.33	10.29

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.04 + 30.38 – 54.63
= 19.79

The cash conversion cycle of Kraft Heinz Co has shown fluctuations over the years based on the provided data.

At the end of December 31, 2020, the company's cash conversion cycle was 10.29 days, indicating that it took approximately 10 days to convert its investments in inventory and other resources into cash.

By the end of December 31, 2021, there was a significant improvement in the cash conversion cycle, which decreased to 0.33 days. This suggests that the company was able to convert its investments into cash much more efficiently within a shorter timeframe.

Subsequently, by December 31, 2022, the cash conversion cycle increased to 11.87 days, indicating a lengthening of the time it took for the company to convert its resources into cash.

Further, by December 31, 2023, the cash conversion cycle increased to 14.01 days, signifying a continued delay in converting investments into cash compared to the previous year.

Finally, by the end of December 31, 2024, the cash conversion cycle reached 19.79 days, showing a further increase in the time it took for Kraft Heinz Co to convert its investments into cash.

Overall, the fluctuations in the cash conversion cycle suggest varying efficiencies in managing the company's working capital and operational processes over the years. It is essential for Kraft Heinz Co to closely monitor and improve its cash conversion cycle to enhance liquidity and overall financial performance.