O-I Glass Inc (OI)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.59 | 50.02 | 51.11 | 53.26 | 62.07 |
| Days of sales outstanding (DSO) | days | 36.24 | 41.93 | 41.15 | 37.30 | 35.56 |
| Number of days of payables | days | 85.33 | 79.92 | 75.79 | 71.32 | 75.79 |
| Cash conversion cycle | days | 14.50 | 12.03 | 16.47 | 19.25 | 21.83 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.59 + 36.24 – 85.33
= 14.50
The cash conversion cycle of O-I Glass Inc has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle was 14.50 days, which represents the time it takes for O-I Glass Inc to convert its investments in inventory into cash received from sales. This figure is an improvement compared to the previous year, where the cycle was 12.03 days.
Looking back at 2021, the cash conversion cycle was 16.47 days, indicating a longer period compared to 2023, despite a decrease from the previous year. In 2020, the cycle was even longer at 19.25 days, showing a significant increase from the prior year. The highest cash conversion cycle was recorded in 2019 at 21.83 days, signifying a longer wait for O-I Glass Inc to receive cash from its sales.
Overall, the decreasing trend in the cash conversion cycle from 2019 to 2023 suggests that O-I Glass Inc has been managing its inventory, accounts receivable, and accounts payable more efficiently over the years, resulting in a shorter cash conversion cycle. However, it is important for the company to continue monitoring and improving this metric to enhance its working capital management and overall financial performance.