PepsiCo Inc (PEP)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	46.39	46.49	46.97	42.80	47.89
Days of sales outstanding (DSO)	days	41.06	43.16	42.94	39.86	43.59
Number of days of payables	days	96.16	101.40	96.54	96.81	101.62
Cash conversion cycle	days	-8.70	-11.76	-6.63	-14.15	-10.14

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 46.39 + 41.06 – 96.16
= -8.70

The cash conversion cycle of PepsiCo Inc has shown fluctuations over the years. For the fiscal year ending December 31, 2020, the company had a cash conversion cycle of -10.14 days, indicating that it was able to convert its investments in inventory and receivables into cash quickly. However, in the following year, the cash conversion cycle extended to -14.15 days, suggesting a slight delay in converting assets into cash.

By the end of December 31, 2022, the cash conversion cycle improved significantly to -6.63 days, indicating a more efficient management of working capital. The trend continued to show improvement in 2023 with a cash conversion cycle of -11.76 days.

For the latest fiscal year ending December 31, 2024, the cash conversion cycle was -8.70 days, which indicates PepsiCo Inc's continued focus on optimizing its cash flow processes. Overall, despite some fluctuations, PepsiCo Inc has maintained a negative cash conversion cycle, reflecting its ability to efficiently manage its working capital and convert assets into cash.