Organon & Co (OGN)
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 | 179.38 | 190.84 | 159.59 | 140.21 | 99.57 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 179.38 | 190.84 | 159.59 | 140.21 | 99.57 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 179.38 + — – —
= 179.38
The cash conversion cycle of Organon & Co has shown a fluctuating trend over the past five years. In December 2020, the company's cash conversion cycle stood at 99.57 days, indicating that it took approximately 99.57 days for the company to convert its investments in inventory and other resources into cash.
By the end of December 2021, the cash conversion cycle increased to 140.21 days, suggesting a slower conversion of these investments into cash. This prolonged cycle may have been influenced by factors such as inventory management practices, collection of receivables, and payment of payables.
In December 2022, the cash conversion cycle further extended to 159.59 days, indicating a continued challenge in efficiently managing the company's working capital components. By December 2023, the cycle increased significantly to 190.84 days, reflecting a potential difficulty in optimizing operational efficiencies and liquidity management.
However, there was a slight improvement in the cash conversion cycle by the end of December 2024, with the cycle decreasing to 179.38 days. Despite this improvement, the company still faces challenges in managing its working capital effectively.
Overall, the fluctuating trend in Organon & Co's cash conversion cycle highlights the importance of closely monitoring and improving working capital management practices to enhance operational efficiency and cash flow effectiveness.
Peer comparison
Dec 31, 2024