Union Pacific Corporation (UNP)
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 | 26.60 | 25.88 | 27.14 | 30.61 | 30.46 |
| Days of sales outstanding (DSO) | days | 32.62 | 28.57 | 30.30 | 28.12 | 26.82 |
| Number of days of payables | days | 30.65 | 27.38 | 32.87 | 29.37 | 30.38 |
| Cash conversion cycle | days | 28.58 | 27.07 | 24.57 | 29.37 | 26.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.60 + 32.62 – 30.65
= 28.58
The cash conversion cycle of Union Pacific Corp. has shown a fluctuating trend over the past five years. In 2019, the company had a cash conversion cycle of 26.82 days, which increased to 28.12 days in 2020 before slightly decreasing to 28.83 days in 2021. However, there was a notable improvement in 2022 as the cycle decreased to 27.75 days. By the end of 2023, the cash conversion cycle increased to 31.37 days.
Overall, the cash conversion cycle indicates the average number of days it takes for Union Pacific Corp. to convert its investments in inventory into cash flows from sales. A longer cash conversion cycle could suggest inefficiencies in managing inventory, collecting receivables, or paying suppliers, potentially impacting the company's liquidity and working capital management. Further analysis, in conjunction with other financial metrics, would provide a comprehensive assessment of Union Pacific Corp.'s operational efficiency and financial health.
Peer comparison
Dec 31, 2023