Pilgrims Pride Corp (PPC)
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 | 39.72 | 39.04 | 39.41 | 40.42 | 43.13 | 43.73 | 44.93 | 44.61 | 44.60 | 43.91 | 42.88 | 40.75 | 39.44 | 41.56 | 43.14 | 43.86 | 41.83 | 41.25 | 43.26 | 44.67 |
| Days of sales outstanding (DSO) | days | 20.54 | 21.75 | 21.64 | 22.11 | 24.07 | 25.13 | 25.17 | 26.22 | 23.15 | 23.57 | 26.01 | 25.04 | 25.23 | 23.61 | 24.33 | 23.97 | 22.54 | 21.55 | 21.72 | 23.54 |
| Number of days of payables | days | 28.91 | 28.56 | 27.11 | 26.42 | 28.67 | — | — | 33.48 | 35.59 | 34.94 | 34.52 | 34.35 | 34.50 | 31.42 | 30.79 | 31.23 | 31.67 | 28.43 | 28.40 | 30.02 |
| Cash conversion cycle | days | 31.35 | 32.22 | 33.95 | 36.11 | 38.53 | 68.86 | 70.10 | 37.36 | 32.17 | 32.53 | 34.37 | 31.43 | 30.17 | 33.75 | 36.68 | 36.60 | 32.70 | 34.37 | 36.58 | 38.18 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.72 + 20.54 – 28.91
= 31.35
The cash conversion cycle of Pilgrims Pride Corp, which measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has shown fluctuations over the reported periods.
From March 31, 2020, to September 30, 2022, the company managed to gradually decrease its cash conversion cycle from 38.18 days to 32.53 days, indicating an improvement in efficient management of working capital. This trend suggests that Pilgrims Pride Corp was able to reduce the time it takes to convert its resources into cash, potentially leading to enhanced liquidity and financial performance.
However, a sudden spike in the cash conversion cycle was observed in the second and third quarters of 2023, where the cycle significantly increased to 70.10 days and 68.86 days, respectively. This spike indicates a potential slowdown in the company's ability to convert its investments into cash, which may raise concerns about its liquidity and operational efficiency during those periods.
Subsequently, Pilgrims Pride Corp managed to reduce its cash conversion cycle again from December 31, 2023, to December 31, 2024, achieving levels close to those seen before the abnormal increase. This improvement suggests that the company may have taken corrective actions to address the temporary inefficiencies in its working capital management observed in the 2023 quarters.
Overall, while Pilgrims Pride Corp has experienced fluctuations in its cash conversion cycle over the reported periods, a general decreasing trend followed by a recovery towards more stable levels indicates an ongoing effort to optimize working capital efficiency and maintain healthy liquidity positions.
Peer comparison
Dec 31, 2024