Tootsie Roll Industries Inc (TR)
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 | 60.42 | 71.75 | 94.77 | 77.98 | 67.03 | 76.86 | 104.90 | 84.07 | 67.71 | 74.17 | 88.30 | 62.06 | 54.53 | 76.01 | 98.98 | 83.08 | 72.32 | 85.92 | 109.53 | 78.84 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 60.42 | 71.75 | 94.77 | 77.98 | 67.03 | 76.86 | 104.90 | 84.07 | 67.71 | 74.17 | 88.30 | 62.06 | 54.53 | 76.01 | 98.98 | 83.08 | 72.32 | 85.92 | 109.53 | 78.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.42 + — – —
= 60.42
The cash conversion cycle of Tootsie Roll Industries Inc, a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has displayed fluctuations over the period analyzed.
The cash conversion cycle varied from a high of 109.53 days on June 30, 2020, to a low of 54.53 days on December 31, 2021. Generally, a lower cash conversion cycle indicates that the company is able to efficiently manage its working capital by quickly converting inventory into cash through sales. This efficient management is desirable as it allows the company to free up cash for other uses, such as investments or debt repayments.
The company saw an increase in the cash conversion cycle from the end of 2021 through the first half of 2023, reaching a peak of 104.90 days on June 30, 2023. This increase may indicate challenges in managing inventory, receivables, and payables during this period. Subsequently, Tootsie Roll Industries Inc was able to reduce its cash conversion cycle to 60.42 days by December 31, 2024, showing improvements in its working capital management efficiency.
Although fluctuations in the cash conversion cycle are common and can be influenced by various factors such as changes in sales, production efficiency, and payment terms with suppliers and customers, it is crucial for Tootsie Roll Industries Inc to strive for a consistently low cash conversion cycle to optimize its working capital and overall financial health.
Peer comparison
Dec 31, 2024