Pilgrims Pride Corp (PPC)
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 | 39.61 | 43.07 | 44.56 | 39.41 | 41.78 |
| Days of sales outstanding (DSO) | days | 20.48 | 24.08 | 23.15 | 25.27 | 22.58 |
| Number of days of payables | days | 28.83 | 28.64 | 35.55 | 34.47 | 31.63 |
| Cash conversion cycle | days | 31.26 | 38.52 | 32.16 | 30.21 | 32.73 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.61 + 20.48 – 28.83
= 31.26
The cash conversion cycle of Pilgrims Pride Corp has shown fluctuations over the past five years.
At December 31, 2020, the cash conversion cycle was 32.73 days, indicating that the company took approximately 33 days to convert its investments in inventory and receivables into cash.
By December 31, 2021, the cash conversion cycle had improved to 30.21 days, suggesting a more efficient management of working capital.
However, there was a slight increase in the cash conversion cycle to 32.16 days by December 31, 2022, which could indicate a slower conversion of resources into cash.
The cycle increased further to 38.52 days by December 31, 2023, which may imply potential challenges in managing inventory and receivables effectively.
By December 31, 2024, the cash conversion cycle had decreased to 31.26 days, showing some improvement in the company's ability to efficiently convert its working capital into cash.
Overall, fluctuations in the cash conversion cycle of Pilgrims Pride Corp suggest varying degrees of efficiency in managing working capital and converting it into cash over the years. It would be essential for the company to analyze the reasons behind these fluctuations and implement strategies to optimize its cash conversion cycle for sustainable financial performance.
Peer comparison
Dec 31, 2024