Olin Corporation (OLN)

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	50.77	45.21	44.98	37.79	42.46
Days of sales outstanding (DSO)	days	0.83	1.70	0.01	1.01	47.22
Number of days of payables	days	45.84	40.21	43.91	40.84	39.79
Cash conversion cycle	days	5.76	6.70	1.08	-2.04	49.90

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.77 + 0.83 – 45.84
= 5.76

The cash conversion cycle for Olin Corp. has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 52.91 days from 42.96 days in 2022, indicating a lengthening of the time it takes for the company to convert its investments in inventory and other resources into cash from sales. This increase may suggest potential issues with managing working capital efficiently or challenges in converting inventory into sales revenue.

Compared to 2021 and 2020 when the cash conversion cycle was 46.47 days and 46.12 days, respectively, the 2023 figure represents a longer operational cycle. It is noteworthy that the cycle in 2022 was the lowest among the past five years. In contrast, the cycle in 2019 was 49.19 days, which was higher than the most recent years but lower than 2023.

The trend in the cash conversion cycle over these five years indicates some variability in Olin Corp.'s efficiency in managing its cash flow and working capital. The company may need to focus on improving inventory management, collection practices, or payment terms to shorten its cash conversion cycle and enhance liquidity and financial performance.