Eli Lilly and Company (LLY)

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	154.20	144.35	116.34	98.50	121.96
Days of sales outstanding (DSO)	days	107.58	121.25	88.19	86.01	87.39
Number of days of payables	days	65.60	64.98	52.11	42.35	49.23
Cash conversion cycle	days	196.18	200.62	152.41	142.16	160.12

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 154.20 + 107.58 – 65.60
= 196.18

The cash conversion cycle for Eli Lilly and Company has shown fluctuations over the past five years.

As of December 31, 2020, the cash conversion cycle stood at 160.12 days, indicating that the company took approximately 160 days to convert its investments in inventory to cash receipts from sales.

By the end of December 31, 2021, the cash conversion cycle improved to 142.16 days, suggesting that the company was more efficient in managing its working capital and converting inventory into cash.

However, by December 31, 2022, the cash conversion cycle increased to 152.41 days, indicating a slight slowdown in the company's ability to convert inventory into sales and then to cash.

The trend continued as of December 31, 2023, with a significant increase in the cash conversion cycle to 200.62 days. This could imply potential challenges in managing inventory levels, sales, and cash collection efficiently.

As of December 31, 2024, the cash conversion cycle was 196.18 days, showing a slight decrease from the previous year but still at a higher level compared to the initial years analyzed.

Overall, the fluctuation in the cash conversion cycle over the years reflects variations in Eli Lilly and Company's working capital management effectiveness and operational efficiency in converting investments in inventory to cash inflows from sales.