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 | ||
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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