ChampionX Corporation (CHX)
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 | 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 | 102.29 | 102.04 | 106.18 | 105.03 |
| Days of sales outstanding (DSO) | days | 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 | 70.94 | 72.10 | 75.71 | 76.41 |
| Number of days of payables | days | 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 | 58.22 | 53.05 | 58.32 | 55.95 |
| Cash conversion cycle | days | 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 | 115.01 | 121.09 | 123.57 | 125.48 |
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 fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investment in inventory and other inputs into cash received from sales.
In Q1 2022, the cash conversion cycle was at its longest, standing at 91.06 days, indicating a prolonged period for the company to recover cash from its investments. Subsequently, the cycle decreased steadily over the next three quarters, reaching its lowest point in Q3 2023 at 55.29 days. This improvement suggests a more efficient management of inventory and cash flow during this period.
However, in Q4 2023, the cash conversion cycle increased slightly to 61.65 days, indicating a longer duration for the company to convert its resources into cash. Overall, it is essential for ChampionX Corp. to monitor and manage its cash conversion cycle effectively to optimize working capital and improve overall financial performance.
Peer comparison
Dec 31, 2023