Pfizer Inc (PFE)

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	74.99	62.53	72.60	130.96	91.61
Days of sales outstanding (DSO)	days	69.74	39.84	51.54	69.49	63.55
Number of days of payables	days	49.39	47.41	44.70	69.94	50.38
Cash conversion cycle	days	95.35	54.97	79.44	130.52	104.78

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.99 + 69.74 – 49.39
= 95.35

The cash conversion cycle of Pfizer Inc. has exhibited fluctuations over the past five years. In 2023, it increased significantly to 120.63 days compared to 62.93 days in 2022, indicating a prolonged time taken to convert company's resources into cash. This increase may suggest inefficiencies in managing the company's working capital.

In 2021, the cash conversion cycle decreased to 92.77 days from 225.99 days in 2020, showing an improvement in the efficiency of Pfizer's operations in converting inventory and receivables into cash and paying off payables. However, compared to 2019, where the cycle was 206.65 days, there has been an overall reduction in the cycle duration, indicating a positive trend towards faster cash turnover.

Overall, the cash conversion cycle for Pfizer Inc. has been volatile, but the company has made efforts to enhance its operational efficiency in terms of managing cash flows. Continued monitoring and optimization of working capital processes will be crucial for Pfizer to maintain a healthy cash conversion cycle in the future.