Consolidated Communications (CNSL)

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	—	36.15	37.59	—	—	94.31	99.75	99.99	44.95	44.51	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	39.91	34.71	32.22	33.98	36.72	34.93	34.75	34.61	38.61	38.99	37.30	36.17	39.11	33.23	32.34	33.75	32.77	34.03	35.71	34.96
Number of days of payables	days	60.57	22.98	27.41	33.69	17.19	30.93	61.11	42.18	70.66	82.07	76.18	48.57	44.98	38.35	27.64	30.59	46.27	50.22	66.02	38.31
Cash conversion cycle	days	-20.65	47.88	42.41	0.29	19.53	98.31	73.40	92.42	12.90	1.42	-38.88	-12.40	-5.87	-5.12	4.70	3.17	-13.50	-16.19	-30.30	-3.35

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 39.91 – 60.57
= -20.65

The cash conversion cycle of Consolidated Communications Holdings Inc has exhibited fluctuations over the past eight quarters. The company's cash conversion cycle, a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has ranged from as low as -3.34 days to as high as 15.08 days during this period.

A negative cash conversion cycle implies that the company is efficiently managing its working capital, as it can collect revenue from sales before needing to pay vendors for inventory. However, a positive cash conversion cycle suggests a need for more efficient management of working capital, as the company is taking longer to collect cash from sales compared to paying for inventory.

The company experienced particularly high cash conversion cycle values in Q4 2022 and Q3 2022, indicating potential challenges in managing working capital efficiently during that period. Conversely, Q2 2023 and Q4 2023 saw negative cash conversion cycles, indicating improvements in the company's working capital management.

Overall, it is important for Consolidated Communications Holdings Inc to consistently monitor and optimize its cash conversion cycle to ensure effective management of working capital and maximize cash flows from its operational activities.