ChampionX Corporation (CHX)
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 | 74.16 | 79.63 | 77.28 | 76.95 | 72.70 | 80.78 | 77.05 | 74.13 | 68.11 | 73.86 | 84.59 | 92.53 | 84.99 | 80.53 | 79.87 | 86.61 | 105.30 | 152.79 | 239.23 | 102.66 |
| Days of sales outstanding (DSO) | days | 46.88 | 43.23 | 43.56 | 46.14 | 51.91 | 49.95 | 49.09 | 50.63 | 57.64 | 61.28 | 65.22 | 73.79 | 69.37 | 72.87 | 75.81 | 82.97 | 107.49 | 130.71 | 173.97 | 73.16 |
| Number of days of payables | days | 68.00 | 66.33 | 69.47 | 75.39 | 62.96 | 68.60 | 70.85 | 67.54 | 58.95 | 64.61 | 69.15 | 75.27 | 74.13 | 69.70 | 66.83 | 66.42 | 73.37 | 84.96 | 124.67 | 58.93 |
| Cash conversion cycle | days | 53.05 | 56.53 | 51.38 | 47.70 | 61.65 | 62.13 | 55.29 | 57.22 | 66.81 | 70.53 | 80.66 | 91.06 | 80.23 | 83.70 | 88.86 | 103.17 | 139.43 | 198.54 | 288.53 | 116.89 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.16 + 46.88 – 68.00
= 53.05
The cash conversion cycle of ChampionX Corporation has shown fluctuations over the quarters, reflecting changes in the company's efficiency in managing its operating cycle. The trend indicates an improvement in the management of the company's working capital from March 31, 2020, to December 31, 2024.
Initially, the cash conversion cycle was at 116.89 days on March 31, 2020, but it rose significantly to 288.53 days by June 30, 2020. This increase suggests potential issues with inventory management or accounts receivable collection during that period.
Subsequently, there was a notable improvement as the cycle decreased to 80.23 days by December 31, 2021. This reduction indicates better control over inventory levels and quicker conversion of sales into cash.
By March 31, 2024, the cash conversion cycle further decreased to 47.70 days, showcasing continued efficiency in managing working capital. A lower cash conversion cycle implies that the company can convert its investments in inventory and accounts receivable into cash more quickly, which is generally seen as a positive indicator of operational efficiency.
Overall, the decreasing trend in the cash conversion cycle of ChampionX Corporation from 2020 to 2024 demonstrates an enhanced ability to manage operating capital efficiently, which can positively impact the company's liquidity and profitability.
Peer comparison
Dec 31, 2024