O-I Glass Inc (OI)
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 | 64.07 | 69.69 | 50.02 | 51.11 | 53.26 |
| Days of sales outstanding (DSO) | days | 31.97 | 34.47 | 41.93 | 41.15 | 37.30 |
| Number of days of payables | days | 75.98 | 93.51 | 79.92 | 75.79 | 71.32 |
| Cash conversion cycle | days | 20.06 | 10.65 | 12.03 | 16.47 | 19.25 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.07 + 31.97 – 75.98
= 20.06
O-I Glass Inc's cash conversion cycle, which measures the time it takes for the company to convert its investments in inventory and other resources into cash from sales, has shown a fluctuating trend over the past five years.
Starting at 19.25 days on December 31, 2020, the cash conversion cycle decreased to 16.47 days by December 31, 2021, indicating an improvement in the company's efficiency in managing its working capital. This trend continued, with the cycle further reducing to 12.03 days by December 31, 2022, and then dropping even lower to 10.65 days by December 31, 2023.
However, on December 31, 2024, the cash conversion cycle increased to 20.06 days, reflecting a potential delay in converting resources into cash that year. This increase may indicate operational challenges or shifts in the company's business activities.
Overall, O-I Glass Inc's cash conversion cycle has demonstrated a generally positive trend of decreasing days over the years, which suggests improved working capital management efficiency. It is important for the company to closely monitor this metric to ensure optimal cash flow and operational performance in the future.