Merck & Company Inc (MRK)
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 | 79.28 | 78.61 | 68.80 | 84.84 | 68.00 |
| Days of sales outstanding (DSO) | days | 58.46 | 62.84 | 58.18 | 69.17 | 69.02 |
| Number of days of payables | days | 52.94 | 48.49 | 49.63 | 65.69 | 52.98 |
| Cash conversion cycle | days | 84.81 | 92.95 | 77.35 | 88.33 | 84.04 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.28 + 58.46 – 52.94
= 84.81
The cash conversion cycle of Merck & Company Inc has shown fluctuation over the last five years. In 2020, the company's cash conversion cycle was 84.04 days, which increased to 88.33 days by the end of 2021. Subsequently, there was a decrease in the cash conversion cycle to 77.35 days by the end of 2022, followed by a significant increase to 92.95 days by the end of 2023. However, by the end of 2024, the cash conversion cycle decreased slightly to 84.81 days.
Overall, the trend in the cash conversion cycle indicates some variability in the efficiency of Merck & Company Inc's working capital management during the period under review. Monitoring and managing the cash conversion cycle effectively is crucial for the company to optimize its cash flow and enhance its overall financial performance.
Peer comparison
Dec 31, 2024