Kenvue Inc. (KVUE)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 41.81 | 61.15 | 62.21 | 66.58 | 78.40 |
| Days of sales outstanding (DSO) | days | 51.42 | 56.78 | 53.46 | 51.74 | 49.48 |
| Number of days of payables | days | 59.24 | 76.40 | 82.00 | 91.95 | 105.43 |
| Cash conversion cycle | days | 33.99 | 41.53 | 33.67 | 26.37 | 22.46 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 41.81 + 51.42 – 59.24
= 33.99
Based on the data provided for Kenvue Inc.'s cash conversion cycle, we observe the following trend:
- On December 31, 2023, the cash conversion cycle was 22.46 days, indicating that the company took approximately 22.46 days to convert its investments in inventory and other resources into cash through sales.
- By March 31, 2024, the cash conversion cycle increased to 26.37 days, suggesting a slightly slower conversion process compared to the previous quarter.
- The trend continued with a further increase in the cash conversion cycle to 33.67 days as of June 30, 2024, signifying a lengthening period between the company's cash outflows for inventory and the subsequent inflows from sales.
- The pattern persisted into the following quarters, with the cash conversion cycle reaching 41.53 days on September 30, 2024, before decreasing slightly to 33.99 days by December 31, 2024.
Overall, the increasing trend in the cash conversion cycle implies that Kenvue Inc. may be facing challenges in efficiently managing its working capital, inventory turnover, and collection of receivables. This may indicate potential liquidity issues or inefficiencies in the company's operations that could require further investigation and management attention.
Peer comparison
Dec 31, 2024