Sonoco Products Company (SON)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.72 | 53.22 | 51.33 | 51.68 | 52.81 | 55.71 | 61.56 | 68.63 | 69.31 | 66.02 | 67.72 | 65.31 | 45.31 | 43.44 | 42.26 | 40.91 | 39.25 | 39.20 | 45.69 | 42.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 74.72 | 53.22 | 51.33 | 51.68 | 52.81 | 55.71 | 61.56 | 68.63 | 69.31 | 66.02 | 67.72 | 65.31 | 45.31 | 43.44 | 42.26 | 40.91 | 39.25 | 39.20 | 45.69 | 42.73 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.72 + — – —
= 74.72
The cash conversion cycle of Sonoco Products Company has fluctuated over the years, showing variations in the efficiency of its working capital management. The cash conversion cycle is a key metric that indicates the time it takes for a company to convert its investment in inventory and accounts receivable into cash inflows from sales.
Sonoco Products Company's cash conversion cycle ranged from a low of 39.2 days on September 30, 2020, to a high of 74.72 days on December 31, 2024. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital, while a higher cycle suggests inefficiencies in managing inventory, receivables, and payables.
The company experienced a significant increase in its cash conversion cycle towards the end of 2024, possibly indicating challenges in managing working capital effectively. This may raise concerns about liquidity and operational efficiency, as a longer cycle means the company takes longer to convert its investments into cash.
Overall, monitoring the cash conversion cycle is crucial for evaluating the efficiency of Sonoco Products Company's working capital management and its ability to generate cash flows from its operational activities. Any significant deviations from historical trends should be carefully analyzed to assess the impact on the company's financial performance and liquidity position.
Peer comparison
Dec 31, 2024