Sonoco Products Company (SON)
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 | 47.12 | 49.72 | 55.31 | 61.63 | 59.47 | 52.76 | 53.73 | 51.60 | 35.84 | 37.38 | 36.28 | 35.02 | 33.67 | 45.78 | 53.34 | 49.56 | 49.31 | 48.94 | 50.02 | 75.04 |
| Days of sales outstanding (DSO) | days | 48.39 | 50.44 | 45.26 | — | 42.54 | — | — | — | 48.22 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 43.10 | 41.86 | 40.44 | 42.46 | 44.45 | 46.13 | 51.77 | 51.85 | 45.99 | 48.38 | 46.15 | 41.80 | 40.11 | 51.98 | 56.41 | 53.35 | 52.64 | 53.58 | 54.14 | 83.15 |
| Cash conversion cycle | days | 52.41 | 58.29 | 60.13 | 19.17 | 57.56 | 6.63 | 1.96 | -0.24 | 38.07 | -11.00 | -9.87 | -6.78 | -6.44 | -6.20 | -3.08 | -3.79 | -3.32 | -4.64 | -4.12 | -8.11 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.12 + 48.39 – 43.10
= 52.41
The cash conversion cycle (CCC) of Sonoco Products Co. has shown variations over the past eight quarters. The trend indicates fluctuations in the company's ability to convert its investments in inventory and accounts receivable into cash.
In Q1 2022, the CCC was 67.20 days, decreasing to 65.23 days in Q2 2022, and then slightly increasing to 64.81 days in Q3 2022. However, in Q4 2022, the CCC increased to 65.82 days. This trend continued into Q1 2023, where the CCC further increased to 71.60 days, indicating a potential inefficiency in managing inventory and collections.
The CCC then decreased in Q2 2023 to 69.21 days and further in Q3 2023 to 65.78 days, showing some improvement. Finally, in Q4 2023, the CCC decreased again to 58.95 days, which may indicate better control over cash flow and working capital management.
Overall, Sonoco Products Co. should continue to monitor and optimize its cash conversion cycle to ensure efficient utilization of resources and maximize cash flow.
Peer comparison
Dec 31, 2023