Yum! Brands Inc (YUM)

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	—	—	50.99	36.95	—
Days of sales outstanding (DSO)	days	40.13	39.05	36.28	35.81	36.75
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	40.13	39.05	87.27	72.76	36.75

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 40.13 – —
= 40.13

The cash conversion cycle of Yum! Brands Inc has shown some fluctuations over the past five years. In 2020, the company had a cash conversion cycle of 36.75 days, which increased significantly to 72.76 days in 2021. This steep increase suggests a delay in converting raw materials into cash received from sales.

By the end of 2022, the cash conversion cycle extended further to 87.27 days, indicating a prolonged period for the company to recover its investment in inventory and receive cash from customers. However, Yum! Brands managed to improve its cash conversion cycle by reducing it to 39.05 days by the end of 2023, suggesting more efficient management of working capital.

In 2024, the cash conversion cycle slightly increased to 40.13 days, signaling that the company may be facing challenges in optimizing its cash flow efficiency. Overall, Yum! Brands Inc's cash conversion cycle has experienced fluctuations, highlighting the importance of monitoring working capital management to ensure effective utilization of resources and timely cash inflows.