Compass Minerals International Inc (CMP)

Cash conversion cycle

		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	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
Days of inventory on hand (DOH)	days	417.10	373.28	543.28	795.95	706.53	544.90	612.74	600.25	610.38	188.08	284.55	264.90	204.57	625.50	665.60	566.40	441.82	551.39	858.03	830.52
Days of sales outstanding (DSO)	days	30.83	47.65	53.84	40.86	29.58	49.25	60.59	50.85	34.76	52.78	58.69	28.03	—	55.67	50.46	41.95	56.19	86.80	55.29	46.24
Number of days of payables	days	71.03	88.31	118.90	232.71	201.30	239.24	230.85	226.18	194.98	101.76	92.29	75.71	92.35	172.97	209.78	188.34	196.06	223.39	280.75	265.28
Cash conversion cycle	days	376.90	332.62	478.22	604.10	534.80	354.91	442.48	424.92	450.15	139.10	250.95	217.22	112.22	508.21	506.28	420.02	301.96	414.81	632.57	611.48

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 417.10 + 30.83 – 71.03
= 376.90

The cash conversion cycle of Compass Minerals International Inc has exhibited fluctuations over the past few quarters. A low cash conversion cycle indicates that the company is efficiently managing its working capital, whereas a high cash conversion cycle suggests inefficiencies in managing its cash flow.

In the most recent quarter, ending June 30, 2024, the cash conversion cycle was 376.90 days, indicating a moderate efficiency in converting its investments in inventory and accounts receivable into cash. This was an increase from the previous quarter, reflecting a slight decrease in efficiency.

Looking further back, the company experienced a significant increase in its cash conversion cycle in the fourth quarter of 2023, reaching 478.22 days. This was followed by a steep decline in efficiency in the first quarter of 2024, with a cash conversion cycle of 354.91 days, indicating improvement in managing its working capital.

In comparison to historical data, the company managed its cash conversion cycle more efficiently in the first quarter of 2022, with a cycle of 139.10 days, before experiencing a sharp increase in the following quarters.

Overall, the trend in Compass Minerals International Inc's cash conversion cycle shows fluctuations, with periods of efficiency and inefficiency in managing its working capital. Further analysis and monitoring of the company's cash management practices may be necessary to ensure sustainable and optimal cash conversion cycle performance.