Perrigo Company PLC (PRGO)
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 | 139.97 | 140.13 | 136.78 | 119.05 | 115.23 |
| Days of sales outstanding (DSO) | days | 57.98 | 57.16 | 57.58 | 75.99 | 93.80 |
| Number of days of payables | days | 58.60 | 65.45 | 55.13 | 50.75 | 61.97 |
| Cash conversion cycle | days | 139.35 | 131.83 | 139.23 | 144.30 | 147.06 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 139.97 + 57.98 – 58.60
= 139.35
The cash conversion cycle is an important metric that measures how long it takes for a company to convert its investment in inventory and other inputs into cash inflows from sales. Perrigo Company plc's cash conversion cycle has shown some fluctuations over the past five years.
In 2023, the company's cash conversion cycle was 139.35 days, which increased compared to the previous year's cycle of 131.83 days. This indicates that Perrigo took slightly longer to convert its investments in inventory and other operating assets into cash during 2023.
Looking further back, in 2021 and 2022, Perrigo's cash conversion cycle was relatively stable at around 139 days. However, there was a slight increase from 2020 when the cycle was 149.76 days, suggesting a temporary inefficiency in converting assets into cash that year.
In 2019, Perrigo had a cash conversion cycle of 147.06 days, showing a slight improvement compared to 2020 but still indicating a relatively long period to convert assets into cash.
Overall, Perrigo's cash conversion cycle has experienced fluctuations over the past five years, with variations in the efficiency of converting investments into cash. Further analysis and monitoring of this metric could help identify potential areas for improvement in the company's working capital management.
Peer comparison
Dec 31, 2023