Ashland Global Holdings Inc (ASH)
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 | 139.54 | 150.03 | 167.02 | 167.37 | 168.32 | 147.08 | 144.34 | 138.87 | 131.51 | 119.81 | 146.74 | 144.42 | 144.33 | 130.34 | 167.94 | 159.64 | 159.01 | 145.56 | 123.18 | 123.66 |
| Days of sales outstanding (DSO) | days | 33.10 | 56.31 | 54.61 | 59.97 | 53.27 | 61.34 | 75.76 | 66.02 | 57.59 | 63.80 | 77.05 | 88.19 | 76.52 | 85.28 | 83.83 | 88.75 | 76.47 | 81.73 | 72.54 | 73.91 |
| Number of days of payables | days | 47.94 | 50.33 | 49.26 | 56.40 | 57.19 | 61.96 | 57.12 | 60.11 | 58.56 | 59.78 | 66.98 | 61.21 | 58.32 | 54.35 | 61.24 | 66.62 | 58.78 | 76.32 | 56.93 | 57.81 |
| Cash conversion cycle | days | 124.71 | 156.01 | 172.36 | 170.94 | 164.40 | 146.45 | 162.98 | 144.79 | 130.54 | 123.83 | 156.81 | 171.40 | 162.53 | 161.26 | 190.53 | 181.77 | 176.70 | 150.98 | 138.79 | 139.76 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 139.54 + 33.10 – 47.94
= 124.71
The cash conversion cycle (CCC) for Ashland Inc has fluctuated over the past few quarters. The CCC represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter CCC indicates more efficient working capital management.
Looking at the data, we can observe that the CCC was relatively stable in the first half of 2022, but it significantly increased in the third quarter of 2022 and then decreased in the fourth quarter. This fluctuation suggests potential challenges in managing the company's working capital during this period.
The increase in the CCC in the third quarter of 2023 compared to the previous quarter could indicate a slowdown in cash inflows or a buildup in inventory or receivables. Similarly, the subsequent decrease in the fourth quarter of 2023 suggests improvements in cash collection or inventory management.
Overall, Ashland Inc's management may need to closely monitor and possibly improve its inventory and receivables management processes to achieve a more consistent and efficient cash conversion cycle. Further analysis of the company's cash flow and working capital components would provide additional insights into the underlying factors driving the fluctuations in the CCC.
Peer comparison
Dec 31, 2023