Peabody Energy Corp (BTU)
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 | 185.56 | 183.28 | 163.48 | 181.84 | 162.20 | 223.07 | 201.90 | 212.32 | 179.22 | 168.57 | 168.44 | 45.15 | 48.52 | 61.88 | 57.78 | 207.60 | 321.72 | 1,120.85 | 1,854.36 | 1,859.63 |
| Days of sales outstanding (DSO) | days | 23.78 | 20.11 | 18.15 | 22.80 | 30.50 | 30.58 | 45.29 | 35.15 | 33.77 | 31.02 | 28.50 | 17.83 | 22.92 | 16.05 | 14.45 | 19.90 | 22.35 | 19.14 | 24.08 | 25.27 |
| Number of days of payables | days | 145.47 | — | — | — | 131.86 | — | — | — | 159.46 | — | — | — | 27.14 | — | — | — | 247.28 | — | — | — |
| Cash conversion cycle | days | 63.87 | 203.39 | 181.63 | 204.64 | 60.85 | 253.65 | 247.19 | 247.47 | 53.53 | 199.59 | 196.95 | 62.98 | 44.30 | 77.93 | 72.22 | 227.50 | 96.79 | 1,139.99 | 1,878.45 | 1,884.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 185.56 + 23.78 – 145.47
= 63.87
The cash conversion cycle of Peabody Energy Corp has exhibited significant fluctuations over the past several quarters. The cycle represents the time it takes for the company to convert its investments in raw materials into cash flows from sales.
In the most recent quarter, ending December 31, 2023, the cash conversion cycle stood at 63.87 days, indicating a relatively efficient management of working capital. This was a decrease from the previous quarter's figure of 203.39 days, reflecting better cash flow management.
However, looking back over the past few quarters, there have been instances of prolonged cash conversion cycles, such as the exceptionally high values observed in the fourth quarter of 2019, third quarter of 2019, and second quarter of 2019, which were 1,139.99 days, 1,878.45 days, and 1,884.90 days, respectively. These unusually long cycles suggest potential issues with inventory management, accounts receivable collection, or accounts payable practices during those periods.
It is important for Peabody Energy Corp to focus on optimizing its cash conversion cycle to ensure efficient use of working capital and improve its overall liquidity position. By streamlining operations, negotiating better payment terms with suppliers, and enhancing customer credit policies, the company can potentially reduce the cash conversion cycle further and strengthen its financial health.
Peer comparison
Dec 31, 2023