The Coca-Cola Company (KO)

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	87.19	85.84	81.14	88.74	84.37
Days of sales outstanding (DSO)	days	27.20	29.60	33.16	34.76	38.89
Number of days of payables	days	110.17	126.55	135.95	126.46	94.98
Cash conversion cycle	days	4.22	-11.12	-21.65	-2.95	28.28

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.19 + 27.20 – 110.17
= 4.22

The cash conversion cycle for Coca-Cola Co has shown fluctuations over the last five years. In 2023, the company's cash conversion cycle decreased to 4.22 days from 7.82 days in 2022. This indicates an improvement in the management of working capital, as the company was able to convert inventory into cash more efficiently.

Comparing to the data from 2021, the cash conversion cycle also improved significantly from 4.93 days to the current level of 4.22 days in 2023, showcasing a positive trend in the company's operational efficiency.

However, in 2020 and 2019, the cash conversion cycle was notably higher at 27.94 days and 28.28 days, respectively. This suggests that during those years, Coca-Cola Co took a longer time to convert its investments in inventory into cash, which could have resulted in cash flow challenges.

Overall, the recent improvements in the cash conversion cycle demonstrate that Coca-Cola Co has been more effective in managing its working capital and converting its assets into cash, which is a positive sign for the company's financial performance.