Mondelez International Inc (MDLZ)

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	59.30	61.14	56.59	59.88	59.83
Days of sales outstanding (DSO)	days	45.73	45.28	40.52	40.56	41.30
Number of days of payables	days	136.49	136.75	140.64	140.46	137.55
Cash conversion cycle	days	-31.47	-30.33	-43.53	-40.02	-36.42

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.30 + 45.73 – 136.49
= -31.47

The cash conversion cycle of Mondelez International Inc. has shown variability over the past five years. In 2023, the company's cash conversion cycle improved to -31.47 days from the prior year figure of -30.33 days. This indicates that the company takes less time to convert its investment in inventory into cash.

Compared to 2021 and 2020, where the cash conversion cycle was -43.53 days and -40.02 days respectively, the company has made significant improvements in efficiency. The decrease in the number of days suggests that Mondelez International Inc. has been managing its working capital more effectively and has been able to generate cash quickly from its operating cycle.

In 2019, the cash conversion cycle was at -36.42 days, indicating a slight increase in efficiency compared to 2023. Overall, a negative cash conversion cycle signifies that the company is efficient in managing cash flows, with the ability to collect receivables quickly and manage inventory effectively. This trend suggests that Mondelez International Inc. has been successful in optimizing its operations to enhance cash flow efficiency over the years.