Newell Brands Inc (NWL)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	67.12	81.82	89.05	101.33	95.69	106.19	102.53	91.43	83.65	79.94	78.43	77.98	59.25	54.23	54.45	54.06	58.70	37.16	38.19	38.34
Days of sales outstanding (DSO)	days	55.75	54.44	56.37	51.21	49.16	55.94	55.13	49.39	52.63	60.56	62.32	58.60	66.59	68.72	63.57	54.17	72.90	79.98	76.75	68.94
Number of days of payables	days	43.98	49.88	46.57	49.40	46.13	60.39	69.11	65.72	67.34	65.12	61.35	61.57	55.20	44.66	36.76	32.94	40.28	22.14	22.43	19.92
Cash conversion cycle	days	78.90	86.38	98.85	103.14	98.72	101.74	88.55	75.11	68.94	75.39	79.39	75.01	70.65	78.28	81.27	75.28	91.32	95.00	92.50	87.35

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.12 + 55.75 – 43.98
= 78.90

Based on the data provided for Newell Brands Inc's cash conversion cycle over the last eight quarters, we observe fluctuations in the efficiency of the company's working capital management. The cash conversion cycle measures the time it takes for a company to convert its inputs into cash flows, reflecting the efficiency at which it manages its operating cycle.

In Q1 2022, the company displayed a relatively efficient cash conversion cycle of 80.46 days, indicating that it was able to quickly convert its investments in inventory back into cash. However, in Q3 2023, the cash conversion cycle deteriorated to 95.29 days, signaling a delay in the conversion of inventory and receivables into cash compared to the previous quarter.

The trend of the cash conversion cycle over the period shows that there have been periods of both improvement and deterioration in the company's working capital management. Specifically, Q2 and Q3 in 2023 saw a significant increase in the cash conversion cycle compared to the previous quarters, indicating potential challenges in managing inventory, accounts receivable, and accounts payable efficiently.

Overall, a high cash conversion cycle implies longer cash tying up in the operating cycle, which may indicate inefficiencies in working capital management and potentially affect the company's liquidity and cash flow. Newell Brands Inc may need to focus on streamlining its operational processes to reduce the cash conversion cycle and improve its working capital efficiency.