Baker Hughes Co (BKR)

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	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	622.01	664.26	683.50	245.06
Days of sales outstanding (DSO)	days	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	98.96	95.43	98.56	100.65
Number of days of payables	days	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	576.12	542.45	563.92	197.12
Cash conversion cycle	days	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	144.86	217.23	218.14	148.60

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 576.53 + 103.54 – 506.02
= 174.05

The cash conversion cycle of Baker Hughes Co has shown some fluctuation over the recent quarters. In Q4 2023, it increased slightly to 112.47 days compared to the previous quarter's 112.40 days. This might indicate a minor delay in the company's conversion of its investments into cash.

Looking further back, the cash conversion cycle in Q4 2023 was higher than in Q4 2022, which suggests a lengthening of the time it takes for Baker Hughes to convert its resources back into cash. However, it is worth noting that Q4 2023 still fell within the range of historical values seen in the past year.

Overall, Baker Hughes Co's cash conversion cycle has been relatively stable around the 110-115 days range, with some minor fluctuations. This metric is important as it reflects the efficiency of the company in managing its working capital and converting its resources into cash. Further monitoring of the trend in the cash conversion cycle will provide insights into how effectively Baker Hughes is managing its liquidity and operational efficiency.