O-I Glass Inc (OI)
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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 56.45 | 63.65 | 70.49 | 72.98 | 63.58 | 64.93 | 60.79 | 60.25 | 50.04 | 47.24 | 46.66 | 51.10 | 51.09 | 51.24 | 50.34 | 52.86 | 53.26 | 48.78 | 61.75 | 62.68 |
| Days of sales outstanding (DSO) | days | 32.36 | 44.70 | 40.93 | 44.94 | 36.24 | 41.27 | 53.31 | 54.34 | 41.94 | 49.62 | 53.80 | 51.56 | 41.16 | 47.84 | 49.33 | 43.17 | 37.29 | 42.66 | 42.74 | 44.35 |
| Number of days of payables | days | 66.94 | 66.20 | 68.90 | 70.56 | 85.31 | 73.92 | 77.39 | 77.10 | 79.95 | 69.84 | 71.65 | 71.38 | 75.75 | 67.34 | 65.65 | 63.78 | 71.32 | 56.77 | 56.33 | 61.36 |
| Cash conversion cycle | days | 21.87 | 42.16 | 42.52 | 47.35 | 14.51 | 32.29 | 36.72 | 37.49 | 12.03 | 27.01 | 28.81 | 31.29 | 16.49 | 31.74 | 34.03 | 32.24 | 19.24 | 34.68 | 48.15 | 45.66 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.45 + 32.36 – 66.94
= 21.87
The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash from sales. For O-I Glass Inc, based on the provided data, we can observe fluctuations in the cash conversion cycle over time.
From March 31, 2020, to June 30, 2020, the cash conversion cycle increased from 45.66 days to 48.15 days, indicating a longer period to convert inventory into cash. However, there was a significant improvement by December 31, 2020, with the cycle reducing to 19.24 days, reflecting better management of inventory and cash flow.
The trend continued into the following year, with fluctuations observed in the cash conversion cycle. There were improvements seen in March 31, 2021 (32.24 days) and June 30, 2021 (34.03 days), but there was a slight increase by September 30, 2021 (31.74 days). The cycle then significantly decreased to 16.49 days by December 31, 2021, indicating more efficient inventory management and quicker conversion to cash.
Throughout 2022 and 2023, the cash conversion cycle remained relatively stable, fluctuating between 27.01 days to 47.35 days. The cycle reached its lowest point of 12.03 days by December 31, 2022, showcasing an efficient conversion of resources into cash.
As of March 31, 2024, the cash conversion cycle increased to 47.35 days, indicating a longer period required to convert resources to cash compared to the previous quarter. The company then showed improvement by June 30, 2024 (42.52 days) and September 30, 2024 (42.16 days), although it was still higher than the levels seen in 2022 and 2023.
Overall, the analysis of O-I Glass Inc's cash conversion cycle reveals fluctuations over time, with periods of improvement and slight increments. Efficient management of inventory and operations play a crucial role in maintaining a shorter cash conversion cycle, which ultimately impacts the company's cash flow and liquidity position.