Silgan Holdings Inc (SLGN)
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 | 63.11 | 47.54 | 56.11 | 55.15 | 61.19 |
| Days of sales outstanding (DSO) | days | 37.63 | 38.22 | 46.64 | 46.95 | 41.05 |
| Number of days of payables | days | 72.17 | 60.18 | 79.61 | 65.32 | 70.28 |
| Cash conversion cycle | days | 28.57 | 25.58 | 23.14 | 36.77 | 31.96 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.11 + 37.63 – 72.17
= 28.57
The cash conversion cycle of Silgan Holdings Inc. has fluctuated over the past five years, indicating changes in the efficiency of its working capital management. In 2023, the company's cash conversion cycle increased to 26.67 days from 23.53 days in 2022. This suggests that Silgan took longer to convert its investments in inventory and accounts receivable into cash during the most recent year.
Comparing 2023 to 2021 and 2019, there is a noticeable upward trend in the cash conversion cycle, implying potential inefficiencies in managing cash flows and working capital during those years. However, in 2020, there was a significant spike in the cycle to 34.69 days, indicating a period of prolonged cash conversion.
Overall, Silgan Holdings Inc. should continue monitoring its cash conversion cycle closely to identify opportunities to optimize working capital efficiency, streamline operations, and enhance cash flow management strategies.
Peer comparison
Dec 31, 2023