Baker Hughes Co (BKR)

Cash conversion cycle

		Dec 31, 2024	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
Days of inventory on hand (DOH)	days	583.67	648.09	629.12	623.40	576.53	585.98	547.78	503.57	490.41	447.11	472.22	529.21	510.13	459.75	444.84	448.18	81.69	86.66	89.69	87.51
Days of sales outstanding (DSO)	days	94.08	94.21	96.95	97.64	103.54	98.97	103.64	107.64	106.33	99.63	100.81	103.35	102.10	96.71	98.39	97.77	101.06	96.48	92.65	95.60
Number of days of payables	days	535.13	546.57	570.57	536.52	506.02	486.71	459.04	448.54	459.51	413.29	438.65	478.72	480.13	393.08	379.47	371.75	65.26	67.52	70.49	77.03
Cash conversion cycle	days	142.62	195.73	155.49	184.51	174.05	198.25	192.38	162.67	137.23	133.46	134.37	153.83	132.10	163.38	163.77	174.20	117.48	115.62	111.85	106.08

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 583.67 + 94.08 – 535.13
= 142.62

The cash conversion cycle of Baker Hughes Co has exhibited fluctuations over the periods provided. The cycle represents the time it takes for the company to convert its investment in inventory into cash flows from sales.

From March 2020 to June 2020, the cycle increased from 106.08 days to 111.85 days before further rising to 117.48 days by December 2020. This trend continued through the first half of 2021, reaching a peak of 174.20 days by March 2021.

Subsequently, there was a gradual decline in the cycle, with improvements observed up to December 2021, at 132.10 days. However, by March 2022, the cycle increased slightly to 153.83 days before dropping to 134.37 days by June 2022.

The cycle remained relatively stable in the latter part of 2022 and early 2023, within the range of 133-137 days. A significant increase was noted by June 2023, where the cycle rose to 192.38 days, reaching its peak at 198.25 days by September 2023.

Though a slight decrease occurred by December 2023 at 174.05 days, the cycle increased again to 184.51 days by March 2024. A notable improvement was observed by June 2024, as the cycle decreased to 155.49 days, only to rise to 195.73 days by September 2024. The cycle decreased significantly by December 2024 to 142.62 days, indicating a more efficient management of working capital during that period.

Overall, analyzing the cash conversion cycle helps understand how efficiently Baker Hughes Co is managing its working capital, inventory, and cash flows to support its operations.