Clearwater Paper Corporation (CLW)
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 | 61.19 | 60.10 | 59.42 | 56.74 | 59.56 |
| Days of sales outstanding (DSO) | days | 32.33 | 33.13 | 34.47 | 31.37 | 33.03 |
| Number of days of payables | days | 31.36 | 39.51 | 36.01 | 30.90 | 31.67 |
| Cash conversion cycle | days | 62.16 | 53.72 | 57.88 | 57.21 | 60.93 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.19 + 32.33 – 31.36
= 62.16
The cash conversion cycle of Clearwater Paper Corp has exhibited some fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 64.78 days compared to 55.35 days in 2022. This indicates that Clearwater Paper Corp is taking slightly longer to convert its invested resources into cash during the most recent year. Looking back at prior years, the trend shows a mix of increases and decreases in the cash conversion cycle: 59.58 days in 2021, 59.19 days in 2020, and 63.15 days in 2019.
Overall, Clearwater Paper Corp's cash conversion cycle has been relatively stable in the range of around 55 to 65 days over the past five years. Analyzing the cash conversion cycle can offer insights into the company's efficiency in managing its cash, inventory, and receivables. Longer cash conversion cycles may indicate inefficiencies in working capital management, which could potentially lead to cash flow challenges. It would be beneficial for Clearwater Paper Corp to closely monitor and possibly optimize its cash conversion cycle to improve its cash flow and overall liquidity position.