Philip Morris International Inc (PM)
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 | 221.96 | 258.60 | 291.05 | 261.61 | 306.19 |
| Days of sales outstanding (DSO) | days | 45.41 | 47.41 | 17.23 | 13.99 | 14.04 |
| Number of days of payables | days | 92.79 | 99.44 | 120.00 | 99.94 | 88.75 |
| Cash conversion cycle | days | 174.58 | 206.56 | 188.28 | 175.67 | 231.48 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 221.96 + 45.41 – 92.79
= 174.58
The cash conversion cycle of Philip Morris International Inc has shown fluctuations over the past five years. As of December 31, 2020, the cash conversion cycle stood at 231.48 days, indicating that it took the company approximately 231 days to convert its investment in inventory into cash received from sales.
Over the next year, the cash conversion cycle decreased to 175.67 days by December 31, 2021, showing an improvement in the company's efficiency in managing its working capital. However, by the end of December 31, 2022, the cycle slightly increased to 188.28 days before further rising to 206.56 days by December 31, 2023.
In the most recent year, as of December 31, 2024, the cash conversion cycle decreased significantly to 174.58 days, indicating that the company was able to reduce the time it takes to convert its investments in inventory into cash.
Overall, the trend in the cash conversion cycle for Philip Morris International Inc shows variability over the five-year period, with fluctuations in the efficiency of the company's working capital management. Keeping this cycle at a lower level is beneficial as it signifies that the company is able to generate cash quickly from its operations.
Peer comparison
Dec 31, 2024