Silgan Holdings Inc (SLGN)
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 | 63.11 | 61.94 | 81.09 | 66.22 | 47.54 | 53.07 | 81.95 | 68.98 | 56.11 | 55.45 | 68.43 | 63.60 | 59.06 | 60.80 | 78.84 | 67.73 | 61.19 | 67.50 | 79.18 | 66.47 |
| Days of sales outstanding (DSO) | days | 37.63 | 79.65 | 63.68 | 54.63 | 38.22 | 65.40 | 57.03 | 53.97 | 46.64 | 70.43 | 62.67 | 53.37 | 46.46 | 66.98 | 58.16 | 48.80 | 41.05 | 60.78 | 54.10 | 48.78 |
| Number of days of payables | days | 72.17 | 43.94 | 48.71 | 44.97 | 60.18 | 42.93 | 57.57 | 57.60 | 79.61 | 55.36 | 54.84 | 50.77 | 69.96 | 53.15 | 57.75 | 48.97 | 70.28 | 52.85 | 57.61 | 52.01 |
| Cash conversion cycle | days | 28.57 | 97.65 | 96.06 | 75.88 | 25.58 | 75.55 | 81.41 | 65.36 | 23.14 | 70.52 | 76.26 | 66.20 | 35.56 | 74.63 | 79.25 | 67.56 | 31.96 | 75.44 | 75.67 | 63.25 |
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 is a measure of how efficiently a company manages its cash flows, inventory, and receivables. It indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle typically signifies better liquidity and operational efficiency.
Analyzing the cash conversion cycle of Silgan Holdings Inc. over the past eight quarters reveals some variations in the company's efficiency in managing its working capital. In Q4 2023, the cash conversion cycle decreased significantly to 26.67 days compared to the previous quarter, indicating improved efficiency in converting its resources into cash.
However, in Q3 2023 and Q2 2023, the cash conversion cycle increased to 96.62 days and 96.94 days, respectively, reflecting a longer period to convert investments into cash. This suggests that the company may have faced challenges in managing its working capital during these quarters.
In Q1 2023, the cash conversion cycle decreased to 76.65 days, which may indicate some improvement in efficiency compared to the two previous quarters. Looking further back, in Q4 2022, Silgan Holdings Inc. had a relatively short cash conversion cycle of 23.53 days, indicating efficient working capital management.
In general, Silgan Holdings Inc. has shown fluctuations in its cash conversion cycle over the past quarters, with periods of both efficiency and challenges in managing working capital. It is important for the company to focus on optimizing its cash conversion cycle to enhance liquidity and operational effectiveness.
Peer comparison
Dec 31, 2023