West Pharmaceutical Services Inc (WST)
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 | 72.63 | 87.15 | 86.48 | 83.41 | 85.04 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 72.63 | 87.15 | 86.48 | 83.41 | 85.04 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.63 + — – —
= 72.63
The cash conversion cycle of West Pharmaceutical Services Inc has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 85.04 days, which decreased slightly to 83.41 days by December 31, 2021. However, the trend reversed in the following years, with the cash conversion cycle increasing to 86.48 days by December 31, 2022, and further to 87.15 days by December 31, 2023.
Notably, there was a significant improvement in the cash conversion cycle by December 31, 2024, where it declined to 72.63 days. This suggests that the company was able to manage its cash flow more efficiently in that year, possibly by reducing the time it takes to convert its investments in inventory and accounts receivable into cash.
Overall, monitoring the cash conversion cycle is crucial for understanding how effectively West Pharmaceutical Services Inc is managing its working capital and liquidity, as well as assessing its operational efficiency in converting input resources into cash inflows.
Peer comparison
Dec 31, 2024