Clearwater Paper Corporation (CLW)

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	61.19	62.15	62.66	63.19	60.11	64.36	58.55	58.41	59.42	61.95	61.90	65.15	56.74	54.61	48.98	49.91	59.64	54.03	56.42	56.50
Days of sales outstanding (DSO)	days	32.33	30.12	33.92	32.11	33.13	32.23	34.97	34.27	34.47	33.52	30.17	27.10	31.37	35.39	38.08	41.75	33.03	32.85	35.74	35.75
Number of days of payables	days	31.36	30.73	31.24	32.76	39.51	37.22	42.17	35.86	36.01	37.08	32.80	33.77	30.90	29.92	28.62	30.47	31.71	27.07	36.00	39.19
Cash conversion cycle	days	62.16	61.54	65.34	62.55	53.72	59.36	51.35	56.82	57.88	58.40	59.27	58.49	57.21	60.07	58.44	61.20	60.96	59.82	56.16	53.07

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.19 + 32.33 – 31.36
= 62.16

Clearwater Paper Corp's cash conversion cycle has shown some fluctuations over the past eight quarters. The company's cash conversion cycle is a measure of the time it takes for Clearwater Paper to convert its investments in inventory and other resources into cash flow from sales.

The company's cash conversion cycle ranged from a low of 52.21 days in Q2 2022 to a high of 67.90 days in Q2 2023. A longer cash conversion cycle indicates that Clearwater Paper is taking more time to turn its investments into cash, which may tie up working capital and limit its ability to fund operations efficiently.

The fluctuations in the cash conversion cycle could be due to various factors such as changes in inventory management, sales cycles, or payment terms with customers and suppliers. It is important for Clearwater Paper to closely monitor and manage its cash conversion cycle to ensure optimal use of its resources and maintain healthy liquidity levels.

Overall, Clearwater Paper Corp's cash conversion cycle has shown some variability over the past two years, and the company should continue to focus on improving efficiency in converting its investments into cash to support its financial health and sustainability.