Packaging Corp of America (PKG)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.21 | 60.08 | 59.67 | 59.39 | 60.59 | 58.97 | 58.53 | 57.87 | 55.85 | 56.81 | 55.51 | 56.72 | 56.24 | 56.31 | 54.27 | 54.57 | 54.38 | 54.12 | 58.18 | 55.24 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 62.21 | 60.08 | 59.67 | 59.39 | 60.59 | 58.97 | 58.53 | 57.87 | 55.85 | 56.81 | 55.51 | 56.72 | 56.24 | 56.31 | 54.27 | 54.57 | 54.38 | 54.12 | 58.18 | 55.24 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.21 + — – —
= 62.21
The cash conversion cycle of Packaging Corp of America has shown fluctuations over the periods provided in the dataset. The trend indicates that the company takes an average of days to convert its resources invested in inventory back into cash.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from the lowest of 54.12 days in September 30, 2020, to the highest of 62.21 days in December 31, 2024. The cycle demonstrated relatively stable performance, hovering around the mid-50s to low 60s in terms of days.
Overall, a lower cash conversion cycle indicates that the company is more efficient in managing its working capital and converting inventory to cash quickly. A longer cycle may suggest delays in the conversion process, potentially tying up resources in inventory for a longer period.
It is essential for Packaging Corp of America to continuously monitor and optimize its cash conversion cycle to ensure efficient utilization of resources and maintain healthy cash flow levels. Identifying opportunities to streamline operations, improve inventory turnover, and manage receivables effectively can help in reducing the cash conversion cycle and enhancing the company's financial performance.
Peer comparison
Dec 31, 2024