PPG Industries Inc (PPG)

Cash conversion cycle

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 65.83 52.25 59.16 61.62 53.16 55.82 57.57 57.68 54.23 63.82 67.88 63.46 59.33 57.33 57.29 58.09 52.79 57.05 73.44 98.70
Days of sales outstanding (DSO) days 66.05 73.70 78.65 74.53 68.69 73.21 78.99 76.95 68.02 74.92 81.23 77.50 72.15 75.71 70.47 68.74 66.48 73.17 80.53 76.73
Number of days of payables days 80.84 59.39 68.29 77.25 64.76
Cash conversion cycle days 51.04 125.95 137.81 136.14 62.46 129.03 136.55 134.63 53.96 138.74 149.12 140.96 54.23 133.04 127.76 126.84 54.50 130.22 153.96 175.43

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.83 + 66.05 – 80.84
= 51.04

The cash conversion cycle of PPG Industries, Inc. has been fluctuating over the past eight quarters, indicating varying efficiency in managing its cash flow and working capital.

In Q4 2023, the company’s cash conversion cycle improved significantly to 49.12 days compared to the previous quarter, Q3 2023, when it was at 147.59 days. This improvement suggests that PPG Industries reduced the time it takes to convert its investments in inventory and other resources into cash.

However, looking at the trend over the past eight quarters, the company experienced its highest cash conversion cycle in Q2 2023 at 161.76 days, which was then followed by a decline in the subsequent quarters. This fluctuation may indicate inconsistencies in managing receivables, payables, and inventory turnover.

Overall, PPG Industries should aim to consistently optimize its cash conversion cycle to ensure efficient cash flow management and profitability. Further analysis of the individual components contributing to the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, may provide insights into specific areas that require attention for improvement.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
PPG Industries Inc
PPG
51.04
Axalta Coating Systems Ltd
AXTA
90.04
RPM International Inc
RPM
88.76