Molson Coors Brewing Co Class B (TAP)
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 | 27.15 | 25.94 | 30.71 | 30.48 | 25.52 |
| Days of sales outstanding (DSO) | days | 10.91 | 11.61 | 10.99 | 17.30 | 20.05 |
| Number of days of payables | days | 72.75 | 67.66 | 80.06 | 79.50 | 69.90 |
| Cash conversion cycle | days | -34.69 | -30.11 | -38.37 | -31.72 | -24.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.15 + 10.91 – 72.75
= -34.69
The cash conversion cycle of Molson Coors Beverage Company has shown a fluctuating trend over the past five years. The company's cash conversion cycle was negative in all years, indicating that it efficiently manages its working capital.
In 2023, the cash conversion cycle improved to -39.64 days from -36.52 days in 2022, which suggests that the company was able to convert its investments in raw materials and inventory into cash more quickly. This improvement in the cash conversion cycle could be a result of better inventory management or faster collection of receivables.
Comparing to 2021 and 2020, the company has managed to reduce its cash conversion cycle further. In 2021, the cycle was -44.60 days while in 2020, it was -40.28 days. This signifies that the company has been more effective in managing its cash flows and working capital over these years.
Going back to 2019, the cash conversion cycle was -26.19 days. The negative cash conversion cycle indicates that the company was able to collect cash from sales before paying off its suppliers and other obligations in a relatively shorter period back in that year.
In conclusion, Molson Coors Beverage Company has shown a consistent ability to efficiently manage its cash conversion cycle, indicating effective working capital management practices over the years.
Peer comparison
Dec 31, 2023