Omnicom Group Inc (OMC)
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 | 38.35 | 37.52 | 36.25 | 33.91 | 35.77 |
| Days of sales outstanding (DSO) | days | 215.14 | 206.83 | 216.42 | 216.53 | 191.10 |
| Number of days of payables | days | 332.30 | 328.95 | 359.13 | 354.50 | 334.76 |
| Cash conversion cycle | days | -78.81 | -84.60 | -106.46 | -104.06 | -107.89 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.35 + 215.14 – 332.30
= -78.81
Omnicom Group, Inc.'s cash conversion cycle has exhibited some fluctuation over the past five years. The company's cash conversion cycle was 215.14 days at the end of December 2023, showing a slight increase compared to the previous year. This indicates that it takes Omnicom Group approximately 215.14 days to convert its investments in inventory and accounts receivable into cash.
Comparing this figure to the trend over the preceding years, we observe that the cash conversion cycle was relatively stable around the 200 to 220-day range, except for a notable dip to 191.10 days at the end of December 2019. This improvement in the cash conversion cycle in 2019 suggests that Omnicom Group managed its inventory and receivables more efficiently during that period.
Overall, Omnicom Group's cash conversion cycle over the past five years reflects moderate efficiency in managing its working capital and liquidity. Further analysis and comparison with industry benchmarks could provide additional insights into the company's operational and financial performance.
Peer comparison
Dec 31, 2023