LyondellBasell Industries NV (LYB)

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	48.52	39.99	47.83	65.09	57.15
Days of sales outstanding (DSO)	days	4.23	29.52	41.20	59.04	36.31
Number of days of payables	days	—	25.86	33.77	35.93	31.34
Cash conversion cycle	days	52.74	43.66	55.27	88.20	62.12

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.52 + 4.23 – —
= 52.74

The cash conversion cycle of LyondellBasell Industries NV has fluctuated over the past five years, indicating variations in the company's efficiency in managing its cash flow and working capital.

In 2023, the cash conversion cycle was 45.09 days, which represents the average time it takes for the company to convert its investment in inventory into cash receipts from customers. This shows an increase from the previous year, where the cycle was 39.69 days, suggesting a slight deterioration in the company's working capital management efficiency.

Comparing the data to 2021 and 2020, the cash conversion cycle was 47.15 days and 79.96 days, respectively. The significant decrease in 2021 compared to 2020 indicates an improvement in cash management efficiency, possibly due to more effective inventory management or quicker collection of receivables. However, in 2020, the company experienced a longer cash conversion cycle, which may have been influenced by challenges in managing working capital during that period.

Looking back at 2019, the cash conversion cycle was 56.99 days. The decrease from 2019 to 2020 suggests that the company made improvements in its working capital management, but the increase in 2021 and subsequent increase in 2023 highlight that further enhancements may still be necessary to optimize cash flow efficiency.

Overall, LyondellBasell Industries NV should continue to monitor and analyze its cash conversion cycle to identify areas for improvement in working capital management, inventory turnover, and accounts receivable collection to enhance overall financial performance.