Organon & Co (OGN)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 179.38 | 188.71 | 178.75 | 177.31 | 190.84 | 178.44 | 185.05 | 176.90 | 159.59 | 139.55 | 147.11 | 146.81 | 140.21 | 93.15 | 90.24 | 99.19 | 99.57 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 179.38 | 188.71 | 178.75 | 177.31 | 190.84 | 178.44 | 185.05 | 176.90 | 159.59 | 139.55 | 147.11 | 146.81 | 140.21 | 93.15 | 90.24 | 99.19 | 99.57 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 179.38 + — – —
= 179.38
The cash conversion cycle (CCC) of Organon & Co has shown fluctuations over the periods analyzed. The CCC represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From December 2020 to December 2024, the CCC fluctuated between a low of 90.24 days in June 2021 to a high of 190.84 days in December 2023. This indicates that there were significant changes in the company's ability to manage its working capital efficiently during this period.
The increasing trend in the CCC from December 2022 to December 2024 suggests that Organon & Co may be facing challenges in managing its working capital effectively. A longer cash conversion cycle can indicate that the company is holding onto inventory for an extended period before generating sales and collecting cash, which can tie up valuable funds and impact liquidity.
It is crucial for Organon & Co to keep a close eye on its cash conversion cycle and work towards optimizing it by streamlining its inventory management, improving sales processes, and enhancing collection practices. By efficiently managing its CCC, the company can enhance its liquidity position and overall financial health.
Peer comparison
Dec 31, 2024