West Pharmaceutical Services Inc (WST)
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 | 72.68 | 78.23 | 82.76 | 85.26 | 87.15 | 86.91 | 92.51 | 92.67 | 86.48 | 86.94 | 86.66 | 89.83 | 83.41 | 80.98 | 82.36 | 77.90 | 85.04 | 81.09 | 78.22 | 72.60 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 72.68 | 78.23 | 82.76 | 85.26 | 87.15 | 86.91 | 92.51 | 92.67 | 86.48 | 86.94 | 86.66 | 89.83 | 83.41 | 80.98 | 82.36 | 77.90 | 85.04 | 81.09 | 78.22 | 72.60 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.68 + — – —
= 72.68
The cash conversion cycle of West Pharmaceutical Services Inc has shown fluctuations over the past few years, indicating changes in the company's efficiency in managing its working capital. The cash conversion cycle measures the time it takes for a company to convert its resources into cash inflows.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 72.60 days to a high of 92.67 days. This suggests that the company's efficiency in managing its cash inflows and outflows has varied during this period.
Overall, there seems to be some seasonal patterns in the cash conversion cycle, with peaks and troughs occurring at different points in the year. For example, the cycle tends to be longer in the first and third quarters, while it is shorter in the second and fourth quarters.
Analyzing the trend over time, there appears to be an increasing trend in the cash conversion cycle from the beginning of the data in March 2020 to December 2024. This may indicate potential challenges in managing working capital efficiently, which could lead to liquidity issues if not addressed.
In conclusion, West Pharmaceutical Services Inc should continue to monitor and improve its cash conversion cycle to ensure optimal management of working capital and maintain healthy liquidity levels.
Peer comparison
Dec 31, 2024