Tootsie Roll Industries Inc (TR)
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 | 32.39 | 35.82 | 27.76 | 39.68 | 34.72 |
| Days of sales outstanding (DSO) | days | 26.47 | 31.06 | 35.08 | 31.86 | 31.06 |
| Number of days of payables | days | 8.65 | 15.99 | 10.85 | 11.52 | 10.13 |
| Cash conversion cycle | days | 50.22 | 50.89 | 52.00 | 60.03 | 55.65 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.39 + 26.47 – 8.65
= 50.22
Tootsie Roll Industries, Inc.'s cash conversion cycle has exhibited some fluctuations over the past five years. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash inflows from sales of its products.
In 2023, the cash conversion cycle increased to 87.05 days from 80.82 days in 2022, indicating a longer period for the company to convert its resources into cash. This could be a result of challenges in managing inventory levels or extending credit periods to customers, leading to a delay in receiving cash.
Comparing the 2023 data to that of 2021, there has been a notable increase from 77.45 days to 87.05 days. This suggests a less efficient management of working capital, which may impact the company's liquidity and overall financial health.
On the other hand, the cash conversion cycle decreased in 2022 from 2021, which is a positive sign of improved efficiency in managing cash flows and working capital. However, the cycle increased again in 2023, indicating a need for the company to focus on streamlining its operations and working capital management.
Looking at the trend over the years, there have been fluctuations in the cash conversion cycle, demonstrating the company's varying ability to efficiently manage its working capital and cash flows. It is crucial for Tootsie Roll Industries to closely monitor and address factors affecting its cash conversion cycle to ensure optimal financial performance and stability.
Peer comparison
Dec 31, 2023