Pitney Bowes Inc (PBI)
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 | 23.19 | 27.98 | 11.24 | 10.85 | 12.96 |
| Days of sales outstanding (DSO) | days | 101.28 | 94.63 | 90.34 | 100.70 | 125.23 |
| Number of days of payables | days | 93.51 | 105.41 | 44.49 | 44.80 | 53.57 |
| Cash conversion cycle | days | 30.96 | 17.21 | 57.09 | 66.74 | 84.62 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 23.19 + 101.28 – 93.51
= 30.96
The cash conversion cycle of Pitney Bowes, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle stood at 65.67 days, indicating an increase compared to the previous year. This suggests that the company took longer to convert its investment in inventory into cash from sales.
Comparing to the cycle in 2019, there has been a noticeable improvement in the efficiency of Pitney Bowes' working capital management as the cycle decreased from 72.66 days to 65.67 days in 2023. This suggests the company has been able to streamline its operations to reduce the time taken to sell inventory and collect cash from customers.
Despite the improvement from 2019, there was a slight increase in the cash conversion cycle in 2022 compared to 2021, indicating potential challenges in managing working capital efficiency. However, the cycle decreased in 2021 compared to 2020, showing effective inventory and accounts receivable management.
Overall, Pitney Bowes has shown some variability in its cash conversion cycle over the years, with fluctuations possibly influenced by changes in sales patterns, inventory management, and accounts receivable collection. Continued monitoring and potential optimization of the cash conversion cycle could further enhance the company's overall working capital efficiency.