Balchem Corporation (BCPC)

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	64.44	67.35	69.84	68.59	65.99	78.67	84.53	67.49	59.79	56.35	55.79	57.66	53.73	60.38	65.58	68.47	70.83	62.33	57.44	55.71
Days of sales outstanding (DSO)	days	49.57	50.84	48.55	50.69	50.96	55.69	57.70	59.36	53.63	52.71	55.83	54.53	50.95	52.26	52.67	58.45	52.99	53.55	58.20	57.00
Number of days of payables	days	32.65	28.77	31.48	29.37	31.61	41.25	39.83	29.15	36.93	26.10	31.91	25.28	18.06	18.19	18.20	19.45	31.46	31.01	24.71	21.98
Cash conversion cycle	days	81.35	89.42	86.91	89.91	85.34	93.11	102.40	97.71	76.49	82.96	79.71	86.92	86.61	94.45	100.05	107.47	92.35	84.86	90.93	90.73

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.44 + 49.57 – 32.65
= 81.35

The cash conversion cycle for Balchem Corp. has shown some fluctuations over the past eight quarters, ranging from a low of 81.35 days to a high of 102.40 days. A lower cash conversion cycle indicates more efficient management of working capital and quicker conversion of inventory and receivables into cash.

From Q1 2022 to Q1 2023, there was initially a decreasing trend in the cash conversion cycle, suggesting improved efficiency in managing cash, inventory, and receivables. However, this trend was reversed in Q2 2023, where the cycle increased to 86.91 days and continued to increase in Q3 2023 to 89.42 days and in Q4 2023 to 81.35 days.

Although the cycle decreased in Q4 2023, it remained higher than the levels observed in the beginning of the analyzed period. The company should continue to monitor and seek ways to optimize its cash conversion cycle to ensure efficient working capital management and sustained profitability.