Smurfit WestRock plc (SW)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 50.52 | 51.76 | 54.95 | 50.59 |
| Days of sales outstanding (DSO) | days | — | — | — | — |
| Number of days of payables | days | — | — | — | — |
| Cash conversion cycle | days | 50.52 | 51.76 | 54.95 | 50.59 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.52 + — – —
= 50.52
The cash conversion cycle of Smurfit WestRock plc has shown a decreasing trend over the years, indicating an improvement in the company's efficiency in managing its working capital. In particular, for the year ended December 31, 2023, the cash conversion cycle decreased to 50.52 days from 51.76 days in the previous year. This suggests that the company has been able to more efficiently convert its resources into cash during the latest period.
Despite fluctuations in the cash conversion cycle over the years, the overall trend indicates a more streamlined process in converting inventory into sales and ultimately into cash receipts. This improvement in efficiency could be attributed to better management of inventory levels, accounts receivable collection, and accounts payable payment terms. By reducing the time it takes to convert investments in inventory and accounts receivable into cash receipts, the company can enhance its liquidity position and potentially optimize its working capital management strategies.
Peer comparison
Dec 31, 2023