ChampionX Corporation (CHX)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 72.70 | 68.11 | 84.99 | 105.31 | 102.29 |
| Days of sales outstanding (DSO) | days | 51.91 | 57.64 | 69.37 | 107.49 | 70.94 |
| Number of days of payables | days | 62.96 | 58.95 | 74.13 | 73.37 | 58.22 |
| Cash conversion cycle | days | 61.65 | 66.81 | 80.23 | 139.43 | 115.01 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.70 + 51.91 – 62.96
= 61.65
The cash conversion cycle of ChampionX Corp. has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle decreased to 61.65 days from 66.81 days in 2022, indicating an improvement in efficiency in managing its working capital. This reduction suggests that the company is able to convert its inventory into cash more quickly and efficiently.
Comparing to 2021 where the cash conversion cycle was 80.23 days, the company has made significant progress in managing its cash conversion cycle. However, it is worth noting that in 2020 and 2019, the cash conversion cycle was considerably higher at 139.43 days and 115.01 days respectively. This indicates that ChampionX Corp. has made notable improvements in recent years in managing its receivables, inventory, and payables more effectively.
Overall, the decreasing trend in the cash conversion cycle over the years reflects a positive development and suggests that ChampionX Corp. has been working on optimizing its working capital management, which is crucial for the company's financial health and sustainability.
Peer comparison
Dec 31, 2023