PPG Industries Inc (PPG)
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 | 49.07 | 52.51 | 53.51 | 52.82 | 47.87 |
| Days of sales outstanding (DSO) | days | 66.05 | 68.74 | 68.02 | 72.21 | 66.46 |
| Number of days of payables | days | 60.26 | 58.66 | 67.39 | 68.77 | 58.73 |
| Cash conversion cycle | days | 54.86 | 62.59 | 54.15 | 56.25 | 55.60 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 49.07 + 66.05 – 60.26
= 54.86
The cash conversion cycle of PPG Industries, Inc. has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to 49.12 days from 59.55 days in 2022, indicating a more efficient management of cash flow. This reduction suggests that PPG Industries has been able to convert its investments in inventory and receivables into cash at a faster rate, potentially due to better inventory management or quicker collection of receivables.
Comparing to the previous years, the cash conversion cycle was higher in 2019 at 50.05 days, improved in 2021 at 48.49 days, and slightly lower in 2020 at 47.33 days before increasing again in 2022 before the recent improvement in 2023. These fluctuations may reflect changes in the company's operating efficiency and effectiveness in managing working capital components.
Overall, a declining trend in the cash conversion cycle is generally considered positive as it indicates the company is efficiently managing its cash flows and working capital. However, analyzing additional financial and operational metrics alongside the cash conversion cycle would provide a more comprehensive insight into PPG Industries, Inc.'s overall financial performance and efficiency in managing its liquidity and working capital.
Peer comparison
Dec 31, 2023