Black Hills Corporation (BKH)

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	820.23	854.96	697.80	659.60	1,062.72	1,192.72	827.98	598.63	856.79	—	—	—	—	352.01	658.38	589.48	751.37	775.96	661.06	555.48
Days of sales outstanding (DSO)	days	57.74	45.15	49.34	89.47	75.21	54.96	59.62	90.78	63.61	51.21	53.60	79.70	61.39	52.33	54.08	74.81	57.28	45.22	48.96	80.44
Number of days of payables	days	950.22	630.92	681.27	879.17	1,588.45	999.69	1,006.03	957.42	1,235.78	—	—	—	—	423.47	738.86	865.20	1,240.97	915.28	967.56	1,132.03
Cash conversion cycle	days	-72.25	269.19	65.87	-130.10	-450.51	247.99	-118.42	-268.01	-315.37	51.21	53.60	79.70	61.39	-19.13	-26.40	-200.91	-432.32	-94.09	-257.55	-496.11

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 820.23 + 57.74 – 950.22
= -72.25

The cash conversion cycle of Black Hills Corporation has shown fluctuation over the past eight quarters, ranging from a low of 33.90 days in Q2 2022 to a high of 56.21 days in Q1 2023. Overall, the company's cash conversion cycle appears to be somewhat volatile, with periods of shorter cycles followed by longer cycles.

In the most recent quarter, Q4 2023, the cash conversion cycle was 48.27 days, indicating that it took the company approximately 48 days to convert its investments in inventory and accounts receivable into cash. This suggests that Black Hills Corporation may have experienced challenges in efficiently managing its working capital in that period.

It is important for the company to monitor and manage its cash conversion cycle effectively to ensure optimal liquidity and operational efficiency. A longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers, which can impact the company's overall financial health. Continued analysis and potential operational adjustments may be necessary for Black Hills Corporation to improve its cash conversion cycle and working capital management.