United Parcel Service Inc (UPS)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 4.04 | 4.63 | 3.72 | 3.10 | 2.95 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 4.04 | 4.63 | 3.72 | 3.10 | 2.95 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.04 + — – —
= 4.04
The cash conversion cycle of United Parcel Service Inc has shown a gradual increase over the years, starting at 2.95 days on December 31, 2020, and reaching 4.04 days by December 31, 2024. This indicates that the company is taking slightly longer to convert its investments in inventory into cash. Although there was a fluctuation in the cycle duration, overall, the trend suggests a lengthening period in which the company ties up its funds in the production and sale of goods before receiving cash from customers. This could potentially impact the company's liquidity and working capital management efficiency, warranting closer monitoring and potential improvement efforts.