Allete Inc (ALE)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	71.61	71.77	76.64	162.08	283.34	370.65	295.89	172.54	85.87	81.56	80.61	68.22	69.32	198.13	219.59	213.28	176.44	120.01	100.75	88.09
Days of sales outstanding (DSO)	days	31.26	22.94	23.51	25.06	38.83	28.49	28.26	29.53	38.17	30.00	29.79	34.62	41.46	29.12	27.29	30.36	34.28	22.44	22.09	24.10
Number of days of payables	days	41.73	44.70	35.23	39.67	64.01	97.57	112.10	66.61	97.56	92.75	91.50	98.65	102.76	209.25	230.57	443.83	400.39	203.57	193.77	160.42
Cash conversion cycle	days	61.15	50.01	64.93	147.48	258.15	301.57	212.05	135.46	26.48	18.81	18.90	4.19	8.02	17.99	16.31	-200.19	-189.67	-61.11	-70.93	-48.23

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 71.61 + 31.26 – 41.73
= 61.15

The cash conversion cycle of Allete, Inc. fluctuated over the past eight quarters, ranging from a low of 47.72 days in Q3 2023 to a high of 208.91 days in Q4 2022.

A shorter cash conversion cycle indicates that the company is able to convert its inventory into cash quickly, which can be a positive sign of efficiency. On the other hand, a longer cash conversion cycle may indicate delays in collecting receivables or managing inventory effectively.

In Q4 2023, Allete, Inc. had a cash conversion cycle of 54.58 days, showing an improvement from the previous quarter. This suggests that the company was able to optimize its cash flow by managing its inventory and receivables more efficiently.

Overall, Allete, Inc. should continue to monitor and manage its cash conversion cycle effectively to ensure timely conversion of inventory and receivables into cash, which can contribute to improved liquidity and financial performance.