Stock Analysis on Net

Danaher Corp. (NYSE:DHR)

$24.99

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Paying user area


We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Google Pay
Visa Secure Mastercard Identity Check American Express SafeKey

Short-term Activity Ratios (Summary)

Danaher Corp., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Turnover Ratios
Inventory turnover
Receivables turnover
Payables turnover
Working capital turnover
Average No. Days
Average inventory processing period
Add: Average receivable collection period
Operating cycle
Less: Average payables payment period
Cash conversion cycle

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Inventory Turnover
The inventory turnover ratio shows a gradual decline from 4.28 in 2020 to 3.8 in 2023, indicating slower inventory movement during this period. However, there is a rebound to 4.15 in 2024, suggesting an improvement in inventory management or sales effectiveness in the most recent year.
Receivables Turnover
Receivables turnover has generally increased from 5.51 in 2020 to 6.75 in 2024, with slight fluctuations in the intermediate years. This pattern signifies an overall improvement in the efficiency of collecting receivables, thereby enhancing cash inflows from customers.
Payables Turnover
Payables turnover exhibits some variability, decreasing from 4.79 in 2020 to 4.48 in 2021, then rising steadily to 5.58 in 2023 before slightly declining to 5.52 in 2024. The upward trend in recent years possibly reflects quicker payments to suppliers, which may impact cash outflows.
Working Capital Turnover
The working capital turnover ratio is notably volatile. It surged sharply from 3.48 in 2020 to 8.4 in 2021, dropped back to around 4.2 in 2022 and 2023, then surged again to 8.85 in 2024. Such fluctuations suggest irregular efficiency in utilizing working capital, possibly influenced by operational changes or shifts in balance sheet management.
Average Inventory Processing Period
This metric has increased steadily from 85 days in 2020 to a peak of 96 days in 2023, indicating a lengthening time inventory remains before sale. It then improved to 88 days in 2024, aligning with the observed improvement in inventory turnover for the same year.
Average Receivable Collection Period
The average receivable collection period decreased from 66 days in 2020 to 54 days in 2024, with relatively stable figures in the intermediate years. This steady reduction reflects enhanced collection efficiency and faster conversion of receivables to cash.
Operating Cycle
The operating cycle fluctuated mildly, decreasing from 151 days in 2020 to 142 days in 2024, with a peak at 156 days in 2023. Overall, this suggests a slight improvement in the combined efficiency of inventory processing and receivables collection over the period.
Average Payables Payment Period
There is a decrease in the average payables payment period from 76 days in 2020 to a low of 65 days in 2023, followed by a marginal increase to 66 days in 2024. This pattern indicates a trend toward faster payments to suppliers, which may reduce payable balances but also increase cash outflows.
Cash Conversion Cycle
The cash conversion cycle decreased from 75 days in 2020 to 63 days in 2021, then rose to 91 days in 2023, before improving to 76 days in 2024. This cycle's fluctuations mirror those observed in inventory and payables periods, reflecting varying efficiency in managing the timing of cash inflows and outflows.

Turnover Ratios


Average No. Days


Inventory Turnover

Danaher Corp., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cost of sales
Inventories
Short-term Activity Ratio
Inventory turnover1
Benchmarks
Inventory Turnover, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Inventory Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Inventory Turnover, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= ÷ =

2 Click competitor name to see calculations.


Cost of Sales
The cost of sales exhibited an increasing trend from 2020 through 2022, rising from 9,809 million USD to a peak of 12,522 million USD. However, in 2023, there was a notable decline to 9,856 million USD, followed by a further slight decrease to 9,669 million USD in 2024. This suggests a reduction in production costs or sales volume after 2022.
Inventories
Inventory levels followed a similar pattern to the cost of sales. From 2020 to 2022, inventories increased from 2,292 million USD to 3,110 million USD, indicating accumulation possibly due to increased production or stockpiling. Subsequently, inventories decreased to 2,594 million USD in 2023 and further to 2,330 million USD in 2024, reflecting a drawdown of stock or improved inventory management.
Inventory Turnover Ratio
The inventory turnover ratio declined steadily from 4.28 times in 2020 to 3.8 times in 2023, indicating that inventory was being turned over less frequently, possibly due to slower sales or higher stock levels. In 2024, the ratio increased again to 4.15, suggesting a recovery in the efficiency of inventory management or an increase in sales velocity.

Receivables Turnover

Danaher Corp., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Sales
Trade accounts receivable, less allowance for doubtful accounts
Short-term Activity Ratio
Receivables turnover1
Benchmarks
Receivables Turnover, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Receivables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Receivables Turnover, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Receivables turnover = Sales ÷ Trade accounts receivable, less allowance for doubtful accounts
= ÷ =

2 Click competitor name to see calculations.


Sales
Sales exhibited a generally upward trend from 2020 through 2022, increasing from $22,284 million to a peak of $31,471 million. However, in 2023 and 2024, sales declined sharply to approximately $23,890 million and $23,875 million respectively, indicating a significant contraction after the previous growth period.
Trade accounts receivable, less allowance for doubtful accounts
Trade accounts receivable rose steadily from $4,045 million in 2020 to a high of $4,918 million in 2022. This was followed by a noticeable reduction in 2023 and 2024, with balances dropping to $3,922 million and $3,537 million respectively. This pattern aligns with the sales decline observed during the same final two years.
Receivables turnover
The receivables turnover ratio improved from 5.51 in 2020 to 6.40 in 2022, indicating enhanced efficiency in collecting accounts receivable amid rising sales. Despite the decline in sales and receivables in 2023, the turnover ratio remained relatively stable at 6.09 and subsequently increased to 6.75 in 2024. This suggests continued strong collection performance and potentially stricter credit management during the sales downturn period.

Payables Turnover

Danaher Corp., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cost of sales
Trade accounts payable
Short-term Activity Ratio
Payables turnover1
Benchmarks
Payables Turnover, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Payables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Payables Turnover, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Payables turnover = Cost of sales ÷ Trade accounts payable
= ÷ =

2 Click competitor name to see calculations.


Cost of Sales
The cost of sales increased steadily from US$9,809 million in 2020 to a peak of US$12,522 million in 2022, representing a significant rise over the three-year period. However, a marked decline occurred in 2023 to US$9,856 million and a slight further decrease to US$9,669 million in 2024, indicating a reduction in direct expenses associated with production or procurement after the peak year.
Trade Accounts Payable
The trade accounts payable showed an upward trend from US$2,049 million in 2020 to US$2,569 million in 2021, followed by a decline in subsequent years to US$2,296 million in 2022 and further decreases to US$1,766 million in 2023 and US$1,753 million in 2024. This pattern suggests a reduction in outstanding obligations to suppliers or creditors after 2021, possibly reflecting improved payment efficiency or changes in purchasing strategies.
Payables Turnover Ratio
The payables turnover ratio decreased slightly from 4.79 in 2020 to 4.48 in 2021, implying a slower rate of paying off suppliers relative to purchases. Subsequently, the ratio increased to 5.45 in 2022 and continued to rise marginally to 5.58 in 2023, before a slight decrease to 5.52 in 2024. This general upward trend after 2021 indicates an acceleration in payment of trade payables, leading to a higher frequency of payments per year relative to the outstanding payables.
Overall Analysis
The data reveals a cyclical pattern in cost of sales, peaking in 2022 before declining over the following two years. Trade accounts payable rose initially but then steadily decreased after 2021. Meanwhile, the payables turnover ratio exhibits a decline in 2021 followed by a sustained increase, suggesting that the company's efficiency in settling its supplier obligations improved after 2021. The combined trends point to a strategic shift in managing payables and controlling costs following the peak expenditure period in 2022.

Working Capital Turnover

Danaher Corp., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Current assets
Less: Current liabilities
Working capital
 
Sales
Short-term Activity Ratio
Working capital turnover1
Benchmarks
Working Capital Turnover, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Working Capital Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Working Capital Turnover, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Working capital turnover = Sales ÷ Working capital
= ÷ =

2 Click competitor name to see calculations.


Working Capital
The working capital shows notable fluctuations throughout the observed periods. It started at 6,400 million USD in 2020, then sharply decreased to 3,508 million USD in 2021, followed by a significant recovery to 7,494 million USD in 2022. Thereafter, it declined again to 5,663 million USD in 2023 and further dropped to 2,699 million USD by 2024. This pattern indicates considerable volatility in the company's short-term liquidity position over the five-year span.
Sales
Sales figures experienced growth from 22,284 million USD in 2020 to a peak of 31,471 million USD in 2022. However, a considerable decline occurred in 2023, with sales dropping to 23,890 million USD, and stabilized slightly lower at 23,875 million USD in 2024. The trend suggests a strong sales expansion phase followed by a significant contraction in the latter two years.
Working Capital Turnover
The working capital turnover ratio witnessed substantial variation, beginning at 3.48 in 2020 and increasing markedly to 8.4 in 2021. It then decreased sharply to 4.2 in 2022 and remained almost constant in 2023 at 4.22. In 2024, the ratio jumped again to 8.85. These fluctuations inversely mirror trends in working capital, reflecting changes in how efficiently the company utilized its working capital to generate sales. Higher turnover ratios in 2021 and 2024 suggest periods of heightened efficiency or lower working capital levels relative to sales.
Overall Analysis
The data reveal a pattern of volatility in working capital and sales performance, with corresponding fluctuations in working capital turnover. The company's ability to generate sales relative to its working capital investment appears inconsistent, highlighting potential operational or market challenges, especially in the 2023 and 2024 periods where both working capital and sales decreased markedly, yet the efficiency in using working capital improved. This may indicate tighter management of resources or shifts in business dynamics affecting the liquidity and sales generation capacity.

Average Inventory Processing Period

Danaher Corp., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Inventory turnover
Short-term Activity Ratio (no. days)
Average inventory processing period1
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Average Inventory Processing Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Average Inventory Processing Period, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =

2 Click competitor name to see calculations.


Inventory Turnover
The inventory turnover ratio displays a declining trend from 4.28 in 2020 to 3.8 in 2023, indicating a gradual decrease in the efficiency of inventory management over this period. However, in 2024, there is a notable recovery to 4.15, suggesting an improvement in the rate at which inventory is sold or used.
Average Inventory Processing Period
The average inventory processing period, measured in days, shows an increasing trajectory from 85 days in 2020 to a peak of 96 days in 2023. This indicates that the time taken to process inventory had been lengthening, potentially reflecting slower inventory turnover or extended holding periods. In 2024, the period reduces to 88 days, which aligns with the observed improvement in inventory turnover for the same year, signifying enhanced inventory management efficiency.
Summary
Over the five-year span, there has been a general deterioration in inventory management efficiency until 2023, as seen in the declining inventory turnover and rising processing days. The partial recovery in 2024 implies corrective actions or operational improvements that enhanced inventory flow. The data highlights the importance of monitoring these metrics closely to maintain optimal inventory control.

Average Receivable Collection Period

Danaher Corp., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Receivables turnover
Short-term Activity Ratio (no. days)
Average receivable collection period1
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Average Receivable Collection Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Average Receivable Collection Period, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =

2 Click competitor name to see calculations.


The data reveals notable trends in the management of receivables over the five-year period ending December 31, 2024.

Receivables Turnover Ratio
The receivables turnover ratio demonstrates a generally increasing trend from 5.51 in 2020 to 6.75 in 2024. After rising to 6.36 in 2021 and slightly increasing to 6.40 in 2022, there was a minor decline to 6.09 in 2023, followed by a sharp increase to the highest level of 6.75 in 2024. This pattern indicates that the company has gradually improved its efficiency in collecting receivables, with a minor setback in 2023.
Average Receivable Collection Period
The average receivable collection period, measured in days, generally decreased from 66 days in 2020 to 54 days in 2024. It reduced significantly from 66 days in 2020 to 57 days in 2021 and remained stable at 57 days in 2022. In 2023, there was a slight increase to 60 days, followed by a reduction to the lowest value of 54 days in 2024. This trend corresponds inversely to the receivables turnover ratio, reflecting improved collection efficiency and faster conversion of receivables to cash overall, despite a small interruption in 2023.

Overall, the data suggests a strengthening ability to manage and collect receivables more effectively over the observed period, with the company generally accelerating its collection cycle and increasing turnover rates, which may contribute positively to liquidity.


Operating Cycle

Danaher Corp., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period
Average receivable collection period
Short-term Activity Ratio
Operating cycle1
Benchmarks
Operating Cycle, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Operating Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Operating Cycle, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =

2 Click competitor name to see calculations.


Average inventory processing period
The average inventory processing period exhibited an increasing trend from 85 days in 2020 to a peak of 96 days in 2023, indicating a longer duration of inventory being held before processing. However, in 2024, this period decreased notably to 88 days, suggesting an improvement in inventory turnover or management efficiency compared to the previous year.
Average receivable collection period
The average receivable collection period demonstrated a general decline over the years. Starting at 66 days in 2020, it fell sharply to 57 days by 2021 and maintained this level in 2022. A slight increase to 60 days occurred in 2023, followed by a reduction to the lowest point of 54 days in 2024. This overall downward trend indicates enhanced effectiveness in collecting receivables.
Operating cycle
The operating cycle, which represents the sum of inventory processing and receivable collection periods, showed some fluctuation but remained relatively stable. It decreased from 151 days in 2020 to 145 days in 2021, then slightly increased to 148 days in 2022 and further to 156 days in 2023. In 2024, the cycle shortened again to 142 days, reaching the lowest point in the observed period. This variability suggests that while inventory and receivable management faced some challenges, the overall operational efficiency improved by the end of the timeline.

Average Payables Payment Period

Danaher Corp., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Payables turnover
Short-term Activity Ratio (no. days)
Average payables payment period1
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Average Payables Payment Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Average Payables Payment Period, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =

2 Click competitor name to see calculations.


Payables Turnover
The payables turnover ratio exhibits a general upward trend over the observed period, increasing from 4.79 in 2020 to a peak of 5.58 in 2023, followed by a slight decline to 5.52 in 2024. This indicates an improvement in the company's efficiency in paying its suppliers, suggesting a faster cycle of settling obligations relative to purchases. The increase from 2021 to 2023 is particularly notable, reflecting enhanced operational or financial management.
Average Payables Payment Period
The average payables payment period shows an inverse pattern to the payables turnover ratio. It starts at 76 days in 2020, increases to 82 days in 2021, then significantly decreases to 67 days in 2022, further declining to 65 days in 2023 before slightly rising to 66 days in 2024. This reduction in days payable indicates that the company has been shortening the time it takes to pay its suppliers, aligning with the increasing payables turnover ratio.
Overall Insights
The interplay between the payables turnover ratio and the average payment period demonstrates a clear shift toward quicker payment to creditors after 2021. The company improved payment efficiency post-2021, reducing the average days to pay suppliers and increasing payables turnover, possibly reflecting stronger liquidity or strategic supplier relationship management. The slight reversals in 2024 suggest a stabilization or moderate adjustment after the period of improvement.

Cash Conversion Cycle

Danaher Corp., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period
Average receivable collection period
Average payables payment period
Short-term Activity Ratio
Cash conversion cycle1
Benchmarks
Cash Conversion Cycle, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Cash Conversion Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Cash Conversion Cycle, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + =

2 Click competitor name to see calculations.


Average Inventory Processing Period
The average inventory processing period showed a generally increasing trend from 85 days in 2020 to a peak of 96 days in 2023, indicating that the company took longer to convert inventory into sales during this period. In 2024, this metric decreased to 88 days, suggesting some improvement in inventory management and turnover speed.
Average Receivable Collection Period
The average receivable collection period experienced fluctuations but primarily demonstrated a decreasing trend over the years. Starting at 66 days in 2020, it fell sharply to 57 days by 2021 and remained relatively stable at 57 days through 2022. It slightly increased to 60 days in 2023 but dropped again to 54 days in 2024, indicating improved efficiency in collecting receivables by the end of the period.
Average Payables Payment Period
The average payables payment period initially increased from 76 days in 2020 to 82 days in 2021, implying a longer time taken to settle payables. However, this period shortened markedly to 67 days in 2022 and slightly decreased further to 65 days in 2023. In 2024, it rose marginally again to 66 days. Overall, the company appears to be maintaining more controlled and shorter payables payment terms compared to the earlier years.
Cash Conversion Cycle
The cash conversion cycle (CCC), which represents the net time between cash outflow and inflow related to operations, showed notable variation. It decreased from 75 days in 2020 to 63 days in 2021, indicating improved liquidity management. However, CCC extended to 81 days in 2022 and further to 91 days in 2023, suggesting a slowdown in cash flow efficiency. This cycle then improved in 2024, reducing to 76 days, but still remained above the earlier low levels.
Summary of Overall Trends
The data reflects fluctuations in operational efficiency metrics with some areas of improvement alongside periods of elongation. Inventory turnover was slower in recent years before a partial correction. Receivables management improved overall, particularly by the end of the period. Payables payment terms initially lengthened but stabilized at shorter durations. The cash conversion cycle mirrored these mixed trends, showing improvement in the early years, deterioration mid-period, and partial recovery in the latest year. This suggests that while the company has taken steps to optimize working capital management, challenges remain in maintaining consistent cash flow operations.