Atmos Energy Corporation (ATO)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	31.37	39.74	52.04	76.60	61.79	46.97	36.30	57.64	77.64	51.89	24.87	72.07	62.95	37.55	20.16	55.89	62.02	47.34	37.65	51.71
Days of sales outstanding (DSO)	days	33.32	34.90	53.67	59.73	29.25	27.38	41.89	64.55	32.63	33.84	53.77	53.55	36.74	32.06	53.54	62.86	29.83	30.94	49.56	54.83
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	64.69	74.65	105.71	136.33	91.04	74.35	78.19	122.19	110.27	85.73	78.64	125.62	99.69	69.61	73.70	118.75	91.85	78.28	87.21	106.55

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.37 + 33.32 – —
= 64.69

The cash conversion cycle of Atmos Energy Corporation has shown fluctuations over the past several quarters. The trend indicates that the company took longer periods to convert its investments in inventory and other resources into cash receipts from sales during some quarters, resulting in a longer cash conversion cycle.

In the most recent quarter, as of September 30, 2024, the cash conversion cycle was 64.69 days, which is an improvement from the previous quarter. This suggests that the company was able to manage its working capital more efficiently, leading to a shorter period to convert its investments into cash.

However, looking further back, there have been quarters where the cash conversion cycle exceeded 100 days, such as in December 31, 2023, and March 31, 2024. During these periods, the company faced challenges in managing its working capital effectively, resulting in a longer cash conversion cycle.

It is important for Atmos Energy Corporation to continuously monitor and optimize its cash conversion cycle to ensure efficient utilization of resources and maintain strong liquidity. By improving inventory management, accounts receivable collection, and accounts payable practices, the company can potentially shorten its cash conversion cycle and enhance its overall financial performance.