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.
Peer comparison
Dec 31, 2023